Sit down with Grandpa and discuss putting an S10 Chevy pickup frame under the Merc. With some planning, you could use the center section of the Merc frame and the end sections of the S10 frame all welded together and still have the body bolted to the original frame section in the right locations. The S10 is a natural for a 350 engine swap and the rear will hold up ok if you don't treat it too badly. Of course, the 9" rear out of an early Ford Explorer would be the rear of choice for a bulletproof swap.

Keep asking questions and discussing it with Grandpa. You'll get it figured out.