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You can pretty much do anything of this nature, but one should always consider the expense first. I really believe that selling the Mallard and buying another coach would make more sense. Not only do you have the engine and transmission and motor mounts to consider, but also the wiring harnesses and all the other parts that won't interchange. Plus all the labor. Even if you do all this yourself, it takes a lot of time and special equipment. Then consider all the problems that come with dealing later on with a motorhome maker that is out of business and with running gear that is hard to find parts for. This really just doesn't pen out on paper well. You might investigate if there are some upgrades to what you have that would help on the oil and fuel issues. Most all companies have made improvements since 1991 and there are a ton of after market products that may help. I realize that this may not be the answer you are hoping to find, but I think it is the most correct one here. I hope this will help in the decision making process. All follow ups are included in our fee and fully expected.
I think any engine is rebuildable..............it may not be able to be bored out larger. I can check with another tech friend of mine and see. Let me get back to you on that.
See the attached link for some info on this............ https://dieselrebuildkits.com/faq-s/detroit-diesel-series-50/detroit-diesel-8-2-liter-engine-in-frame-overhaul-rebuild-kit
Most blocks just need to be honed unless they have a bunch of wear in the cylinders.............
Were you able to come to any conclusion on this project? Please let me know if you need more here.