OK, I think I have figured out part of the confusion. According to the online manuals there were 2 thermostat housing components for these 300D's - with a change made in style starting with 300D's manufactured AFTER Februaury 1979. My car is the earlier model (see link below):
http://skinnerbox.steaky.org/Service/W123/w123CD2/Program/Engine/615/20-110.pdf
In this model the thermostat sits straight down, you pretty much just drop it into the housing, install the small rubber ring gasket and bolt the housing down and you are supposed to have an arrow on the thermostat edge that is to point upward, or to the rear of the engine as you rotate the thermostat in the housing to the proper orientation.
I have found two thermostats online for these models as well - one for engines up to 12-067785 and one for engine numbers above 12-067785 - mine is the first group. I don't know if I got the wrong one from NAPA (If they are both 80 degree C, does it really matter) or if having the thermostat rotated the wrong way makes any difference or not??? It seems to according to the above online manual, but...???
Am I making any sense?
ryan