Is it a red flag if my C60 doesn't have the engine it left the factory with?

A Chevy 261 is absolutely a fine engine for that cab and chassis, and it's likely a step up from the original Mercedes diesel if it's in good running order. Those older OM series diesels are notoriously finicky and often require their own specialized tuning and maintanence, whereas a Chevy six is a very common platform, wich usually translates to easier access to service information and spares. For value, if the 261 is strong and running right, you shouldn't have to push the price down significantly just for it being a swap. In fact, compared to another truck that still has an ancient, potentially seized diesel, a running 261 makes the whole package far more appealing to a typical buyer looking for an easy road-legal hauler. You're looking at a common six instead of a specialized diesel conversion. As for parts for the 261, they are plentiful. Since it's a standard Chevy small block derivative from that era, you won't be hunting down rare bolts or hard-to-find castings; parts for the engine itself are usually readily available at a general truck parts store or online from big suppliers. You just need to make sure whoever had it last didn't mess with the mounting points or ancillary systems too much during the swap. As long as the engine is solid and the rest of the truck is in shape, you've got a solid, reliable powertrain. The truck runs, which is the biggest win right there.

Ran a 261 in a '58 for about six years before I sold it. One thing worth doing before you negotiate: look at the rating plate on the cab or the VIN to see what engine code the truck was built with, beacuse those trucks could be ordered with a few different sixes depending on gross weight rating. Mine was bored .030 over during the rebuild and I never had trouble finding pistons, gaskets, or a head. Ask the seller to compression test it cold before you shake on anything.

One thing I'd check under the hood before you shake on a price. If that Mercedes was in there for a while, there's a decent chance the swap back left some weirdness behind, like mismatched motor mounts, odd holes drilled in the frame, or a hacked up throttle linkage. Seen that more than once on trucks that bounced between engines. Also, did the seller say why the diesel got pulled in the first place? Sometimes it's just parts availability, sometimes it's because something upstream let go. And yeah, make them start it cold in front of you, no exceptions.