It is not an impossible dream but will require money, skill and knowledge. To really replicate the S42 you would want to go for a lot of custom stuff, crank, lifter tray, yad yad.
The biggest issues is the cfm of the M42 head. You really want about 220cfm -240cfm but the best I have seen is 170cfm. I don't know what the S42 cfm was but I can bet there was some serious reshaping involved.
One thing I think everyone seems to not point out is the cooling passage for the S42. Water would go in through the front of the head, down through the pump, around the cylinders, up the exhaust side of the head, over the exhaust valves, over the intake valves and out the side of the head from 3 holes.
This is the usually way race engines work, as it has better cooling path and reduces hot spots allowing more timing advance. This is a good start that most DIY people can do, that all miss.
Home DIY with time, effort and knowledge should be able to get 260hp from the crank from a 2.1lt build.