I can't argue with the above comments, and whatever happens, I just want to see it.
Bummer it's not one year later where I believe the diagonal supports are gone. You've got to make the call about whether to cut them out and get more room to work. I would assume that if you leave them in, you are limited to sohc inline engines.
As far as a differential goes, I am pretty confident that the rear subframe on these cars is identical to the c107 SLC cars, including the 5.0 SLCs that had differentials around a 2.72 I think. There should be tons of 3.07 4.5 differentials around from 450sl and 450slc cars. The rear subframe on r107 cars is different, but I assume that the differentials are the same. And if the differentials are the same, then it's possible that even lower ratio differentials from 1982-1989 r107 would also bolt right in, more likely the 380slc and 380sl, but maybe also the 560sl. But definitely investigate before you go out buying one of those.
And speaking of the rear subframe, I wonder if the anti-squat / anti-dive rear end that was available with the aluminum control arms would also bolt into the rear end. Hmm...
Do you have any aspirations for a manual vs automatic transmission?
Now that I have a w115 manual trans setup sitting in my garage, plus a euro m110 with another manual trans rolling around in my garage, I kind of wish I attempted an engine swap in my 1970 250c w114 car before I got rid of it. Oh well. I will have to live vicariously through your adventure!