I have a 1974 Mercedes Diesel that is rotting away. Am thinking of hotrodding it, but want something more.... interesting than a Chevy or Ford smallblock as a replacement drivetrain. So, why not the 2.7t, a motor I'm familiar with from my S4.

Any idea what transmission can be used to bolt up to it for a RWD setup?

The front axle outputs would not be needed, but I assume you could run it all through the rear output shaft.

with no front wheels attached, the rear output shaft won't turn.

you can put the engine in the trunk and use a porsche tranny because at some time or another, porsche used the same 01E transmission that audi uses. Well, it's not the same, but many parts are interchangeable. it would work...someone in Europe is doing this to an old-school Coupe Quattro. =)

Why not just use the 2.7T engine with the MBZ trans? Or if you want a Tip, use one from a BMW?
Either way I think you'll wind up using an adaptor plate of some sort.
I would think an all MBZ swap would be easier tho, like an MBZ 5.0 V-8 in place of the diesel should be a natural...., keep it all in the family so to speak..................