So we're finishing up with a pretty complete mech. refresh and several other performance enhancements "while we're at it". The "we" in this case is Pedro Campuzano and myself, other vendors and machinists. Before I get started I'd like to note that none of this will alter the car in a way that can't be reversed. I had a desire for better handling, better acceleration and more speed. I'll start the list of mods and solicit comments, different ideas and perspectives and what others have done. The one area that hasn't been addressed yet is braking so ideas please for possible later mods.
Engine/head: for the time being only head work. New bronze guides, high performance SS valves with "modern" valve head design with thin stems (6mm). improvements with minor smoothing of ports, new MB valve springs, rockers, and studs. a .0100 resurface of the head will add a few points of compression. The idea is to make small improvements to the stock system which will improve both intake and exhaust flow and maybe add a few rpm to valve train capability and response. We will swap out the cam for a reground cam with slightly more lift and duration. Sourced from an old grinder who has considerable experience with our generation of MBs. New "blueprinted" injectors and a freer flowing intake/cold air system round out the engine mods.
Suspension/handling: 14X7 alum. wheels, Koni shocks, lowering springs, urethane bushings, and complete subframe refreshes (front and rear) i.e. new bushings and mounts everywhere. Tyres/tires are being researched at the moment.
Ignition/spark: an electronic distributor with programmable advance curves source from the EU - it was easier/cheaper/with better quality than rebuilding the original
Odds and ends: lightweight LI battery in stock location
Years ago, Motor Trend, or Car & Driver, or one of the mainstream American magazines took a whole bunch of these ideas of "improved performance" and better gas mileage etc. and put them all on a car. The results were, well, nothing.
Some people have had some clearance issues with stock wheel/tire sizes and exhaust. At this stage of life there is no stock exhaust system any longer. Anything original from the factory is long gone. Ever so slight differences in the bending of pipes can make the difference between fitting and clearance, and an issue that must be dealt with. I'd suggest that the difference between a 6" and 7" wheel, all else being equal, would not be noticeable in normal daily driving but more so in spirited driving as they would say. Remember for the day, the 230SL offered stable, neutral cornering. Exceptional road manners (when compared to other small roadsters). But it was never a "sports car" and more of a luxury touring car. See if you can find the book that has the test reports done in the 1960s on the model for some period-correct reviews. On my own car the first tires I had were Pirelli P6000, 205/70-14. I had a problem with rubbing in the front wheel well on lock turns, but others have not. I have since changed to the factory size and won't deviate from that standard.
Koni adjustable shocks are something many have done before.
The 123 distributor with or without programmable advance curves is a fine addition, pretty much universal accolades for this unit. 10-20 years ago, parts were available to rebuild the older -051 cast iron distributor, but I'm fairly certain these parts are gone. Dan Caron in Canada used to rebuild these, but I don't know if he does any longer. The other guy who used to do this, Glenn Ring in NY, stopped. Any wear in an old distributor will not be corrected by any add-ons like a Pertronix. You didn't mention 123 by name but said EU sourced. If there's another distributor replacement, I don't know what it is.
Nobody might know more about engine mods than Pedro, and nobody might know more about specific engine changes to the M127 than Dan Caron. Once you get it all together and have it tuned properly for normal starting and operating and feel comfortable with its daily operation, I'm sure Pedro can point you to a dyno for testing to see how all these engine mods have worked out for you. I sure hope for your sake that you don't end up chasing gremlins all over the place, things like now the engine runs too hot and you need some additional cooling, or the mechanical fuel injection isn't quite what is needed. We have not heard of too many direct engine modifications on the three engines found in Pagodas. So your results will be interesting.