I have converted the MTH RS27 (3) and SW1200 to 2 rail. I started with unpowered units in all cases. I think both models were Railking, but not sure. they are scale size (railking scale).
The RS27s, I used P&D power mechanism with Alco RS truck frames which I think were Weaver surplus. It was pretty simple, I just had to make body bolsters to mount the trucks to, and a motor mount in the body. I did 2 for myself and a 3rd for a friend.
The SW120 (I think that is what it is) has actually been done twice. The first I used an old All Nation switcher mechanism which had AAR trucks. That worked fine. Then I was given a box of 2 rail MTH parts that included two power trucks without side frames. I changed it over to that and used the side frames that came with it originally. The unit was painted Armco Steel Corp and I worked for them for a number of years, so it has a sentimental interest.
But basically I put in new mechanisms using the existing frames rather than change the MTH block drives.