I looked into this extensively for my 95 4Runner. I like the truck, just not the engine. Normally, you will trade off fuel economy for performance. Toyota seemed to nail poor economy AND lack of power with this engine.
The options I was considering:
1KZTE - it's an indirect injection (old technology, less efficient) and not exactly a drop in even though it was offered in this truck overseas. Some were intercooled, some not. Prices of half cuts were a little pricey and I think they're harder to come by as time goes on. You need to get the computer. Most were right hand drive, so you need to mod the harness and get it to work with the truck electronics/gauges. When I looked, there was at least one guy who can do this, but it's not cheap. Or, maybe you're electronically inclined.
D4D. The common rail Toyota (modern) diesel engine. Mucho dollars for a used one and all of the complication of buying half cuts and wiring, computer, etc. Dieseltoys did (does?) these swaps. Not cheap, but would be awesome if you have deep pockets.
VW TDI. Either the AHU or ALH are awesome little engines and can be tuned up quite a bit. Less displacement, but also relatively low weight. They're available and not too expensive used. There is also good support for parts and performance. It has been done into Toyota trucks too. Check out Tdiclub swaps forum. This was probably would be my choice if I were to proceed with a diesel swap.
International Harvester 3.0 (engine type escapes me at the moment). It was offered in the Ford Ranger in Brazil and was recently still available new as a crate engine. From what I've read, this is a particularly interesting choice. I think it will be costly if you go new. Finding a used one will mean buying sight unseen from Latin America.
Tdi200, Tdi300, Td5. Landrover engines. They are available from Europe and can be somewhat performance tuned. No offense to any LR owners, but it's a landrover product and I'm not convinced they are reliable having known several LR owners and hearing all of their tales of woe.
OM617. I've heard that it costs some money to turn up the power and I think you'll want a little more than it offers stock. It's heavy. MB parts are expensive if you have to go to the dealership...it's a whole new level of spending. However, they're known for reliability and longevity - maybe because they're conservatively tuned.
Basically, the cost/benefit analysis doesn't look favorable for any of the diesel swaps I considered. You will be doing it because you really WANT to have a diesel. That's why I was looking at it and decided not to pursue anything at this time. The 3.4 gas swap is IMHO the best option if you're looking for better mileage and more power at a reasonable cost and one you can have a pretty reasonable chance of success.
I think the 4bt is quite heavy and that will have consequences with braking/handling and will require front end suspension mods.
For now I am just driving the 3.0 and enjoying the scenery (as I slowly make my way along).
