instead of going to the straight vw t3, u could do what i have done(but not driven yet), which is use the mercedes compressor, with the vw hot side. this should give much better spool up while still keeping the efficiency up at 30psi. you could also take your merc turbo and get a newer staged turbine wheel installed (like turbonetics), honestly i can't say how that will change things, but i think it will improve flow, and possibly spool up because it is a much newer design, vs the 70's turbine wheel the mercedes came with. the mercedes diesels had the older t3 turbine wheel that had a larger inducer, which was actually worse because it was heavier. the vw turbos, and most any other t3 had the newer smaller wheel that had better spool up and the same flow. so u could possibly improve spool up just by swapping to the later .48 wheel and housing from a saab, volvo, or turbo dodge.
u could also go the vnt route, check out what the tdi guys use for what ever your power goal is, the same turbos will apply to your 1.6