Ok, I made this big reply to this thread, but by the time I had it finished, the board had logged me out and in anger I closed the window without copying my reply to paste. Verylongstoryshort: Yes, I put a mercedes 3.0l 5-cyl turbodiesel engine in my 88MJ. it was 2x4, still looking for suitable divorced transfercase to go 4x4. Great rpm range, excellent highway performance, excellent low end power, Towablility was great so long as I didn't have to STOP in a hurry. Honestly, it felt alot like driving my wife's '04 Rubicon with just a touch less romp, and I could pass MANY fueling stations in comparison. I was averaging 27mpg highway running stock d35 4:11 with 31's at 80mph.
Hurricane Katrina sucked, water got deep enough to float out my 31" spare tire out of the bed, salt water that is. Engine/tranny salvaged, truck... well, the truck was never never ever meant to be submerged in saltwater.