I have a D2 5U. I am in the process of doing the direct start conversion. I have removed the bell housing and about ready to start drilling.  I've read hundreds of forum pages on here trying to figure out what parts to use that will fit the easiest. I have went through all of old magnets instructions on his webpage and I'm getting conflicting part numbers. I plan to buy a starter off ebay that would be the same as a 4N8118 or 8H1813. It is a 40MT 24V CW rotation 11 tooth starter. I am confused on the starter nose I would pair with this starter. The Barsanco 512-135 on OM's site is for a 42MT. Would I need the 1M0023 Adapter for this ebay starter? I've searched for a list of compatible starters and drive end housings but haven been able to find such a post. Whats the best combination to use for this conversion?

To build a correct conversion starter requires a matching lever housing, drive end housing and the RH helical drive. It will depend on what starter is used. My recommendation is the 42MT. The 40MT's can be early or late models. Early versions used flat gasket sealing between the lever housing and the drive end housing. Later models use o-ring seals. All 42MT's are o-ring seal and the same drive end housing fits o-ring seal models 40, 42 and 50MT starters. Lever housings also come in flat gasket and o-ring seal versions so lever housings and drive end housing need to match.
Not all lever housings have the same drilled pattern indexing so if you grab any old starter you may not get a match.
Best bet is to obtain the starter you want to use, remove whatever drive end housing it comes with and photograph the drive end housing and post here. I'll be able to tell whether what you have needs to be changed or not and what drive end housing you can use.

Old Magnet, Thanks for the prompt response. I am considering having the starter built by J&N, they are local to me. If I've attached the pictures of what I think I need. If they assemble a 42MT with this 12 tooth helical drive and offset housing would that be correct for the D2?     

That's the right stuff but still depends on what lever housing is used to pick up all six indexing screws. The solenoid will stick out horizontally when the indexing is right.

Is there a part number or description for the correct lever housing or is that something you just have to see?

These are the preferred lever housings for your D2....
Second one is a Delco 1047630