Dont think I would leave the turbo on...I have a 200 in my S3...broke my heart taking out the old 2.25d...been in it from new and I cover over 200.000miles with it...but it was finished...
As I use my Landrover daily I needed an economical diesel...I had read about fitting a 200 as a DI on Glencoynes web site and thats the route I went down.
Cost me £400 for an old S1 disco with its 200tdi...got a lot of that back in part and scrap value.
To be honest the 200di gives me all the power I need in my S3 SWB...heavier than a S1...a 200di will be more in keeping in a S1 IMHO...I get near 40mpg on a run.
And the DI is kinder to the gearbox...not to strong.
Keep you old engine and then you have the choice to refit it.
Nick.