I put an Mercedes 5 cylinder in my jeep Cherokee back in highschool. It managed high 20s in the city with a 5" lift on 32" tires. It also started life as an auto.
why dont you use a more modern 4 cylinder turbo diesel? it will give you better gas milage and will have much more power. you could use a om646 for example
This engine was basically free, including the top end rebuild, and has the same bolt pattern and footprint as a 1.9 turbo. If I ever decide to upgrade, it will be a direct swap. Also, this is the first time I've ever rebuilt an automobile engine, and I really didn't want to mess up on something actually valuable.
The three-speed cost me $50, and no amount of gears or rear end ratios will get 50 horsepower much past 55 mph, so anything more than a three-speed didn't make sense