I'm a new owner of an old M-B diesel [ 1980 240D ] and have also helped push my Son into investing an a 1980 300D. We are extremely happy with a small independent shop here in Novato, CA:
Karl's Mercedes Service
19L Hamilton Dr.
Novato, CA 94949
415-883-3937
Karl has had his shop for ~35+ years and he too does not like to throw parts at his customer's cars unless absolutely necessary. He really likes the diesel models but will work on just about any MBZ. He expects to ad some new test equipment soon that will enable him to more effectively service the older diesels by checking their injection pump timing.
Great guy, I often have coffee with him up town in the morning!
Sam