I'm attaching a word document with a chart I made back when I thought it would be a good idea to swap in a small diesel. I almost bought a Lincoln with the BMW-Steyr motor one time. You could do it, and there are import engines from Japan with transfercases if you have a few thousand. But I decided that my 4.0 was better than anything I could find, including a Mercedes.
The file I attached isn't complete--even the Ranger motors aren't complete--but it's useful. I wanted to have 220ft# (the Ranger 4.0 can turn with 200ft# at 1,000rpm by the way) and the only Mercedes that can do that is the 350SD. Those are rare and very expensive. The rest of the Mercedes force are wiffle engines. There's nothing magic about being a diesel. 120ft# is going to stink in anything. And I think the Mercedes motors have aluminum heads. Putting one in a heavy 4x4 with the gearing Rangers have could lead to problems. For a 2wd going after street mileage, sure, it's a great idea--if you don't mind going slow.
Think about your power to weight. My B2 is 4,200# and my little Civic is 2,084#. The B2 is 155hp and the Civic is 76hp. Both scoot along at the same rate--not real fast but they both dig in and go when you need to pull out in traffic. They should both 0-60 in 11.3 seconds.
So take the Civic motor and put it in the B2 and you suddenly have a stinking pig. 19.7sec 0-60. That's dangerously slow and the kind of numbers you would be looking at with an old Mercedes diesel--worse if you don't get one with a turbo. And a 100ft# diesel isn't going to make 200ft# at 1,000rpm. It would be like trading in your 4.10 gears for a set of 1.8-1 rear gears. You'll be beating up the clutch trying to get that thing going. These are all reasons that my 4.0 is still beating under the hood.