That's an intersting engine conversion. Those Merc engines are absolutley bullet proof, 400,000 miles is nothing and you can get the parts. They are smooth and quiet and I think it would be one of my to engine choices, the only problem is they are poor on low end torque. I suspect the power is about the same as a 2 1/4, the 4 cyl was only about 50hp.
I second all those who have said get it working right first, then drive it and then decide what to do cosmetically. I would keep a look out for a S2A lights in grill front end, it will add a lot of value and they are getting rare.