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Gordon's friend probably said the engine was 'M10' based, not M1.
The 2-liter in the 2002 (which began life at 1.5 liters in the 'Neue Classe' car that saved the company in the mid-'60s) was usually referred to as the 'M10' engine.
When rebuilding, it's common to bore them out a bit.
The valve cover in Gordon's photo looks identical to the one in my old car, but the induction certainly doesn't. The battery originally lived where that air cleaner is. I would wager the new one is now between the shock towers in the trunk.
The front shock tower brace is after-market, but, curiously, the radiator is stock, as is the brake fluid reservoir.
These cars were built like tanks. The chassis could probably handle twice the original power with no mods, but there was a lot of body roll built in and most modern drivers want to flatten that out with suspension upgrades.
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