You wont be doing any good even if you install a 300TD or a 350TD. You should stick with the 2.9 or the 2.5 NA.
I know someone who has experimented with a 2.5 td but it hardly made any difference so he went back to the original 2.9l. No matter what engine you put in these old G's they will still be slow if you keep the original diffs and tranny. Thats how they has been designed.... for power not speed.
And about the turbo engines, the 300TD. I dont know which one are you talking about the 5 cylinder or the newer 6 cylinder om606 with ecu. There are very rare and will cost you like 3-4 lacs with ecu and all. And i dont think it will still work cuz its too complicated for these desi mechinics to work on.
The older 5 cylinder 300TD should not be a problem, its commonly available and mostly transplanted in the W126.
The 350TD was mainly marketed is the US, and as far as I remember that emgine has some designed issue due to which it suffered from very early engine failures. You should carry out ur own research! Cheers!