thanks for replies.
rrgrassi: return lines were ok, but will check again. going to take car back from mechanic today so I can test it running on diesel. water in oil could be possible i suppose. how fast does the cavitation occur? how to fix? i'm thinking it might be something else though, because wagon didn't have same probs (although wagon has big Davco filter, maybe it does some water separating too, i'll check.)
thanks!
mike0000: i have a clear inline filter (the pre filter) and it just shows regular bubble, no extra air so far.
the conversion on this one is most basic: Vegtherm inline heater from Plantdrive, 12 v. pump before spin-on, and injection line heaters. That's it. My wagon has no inline heater, just coolant warmed Davco fuel pro filter with 10 micron big filter, then injection line heaters.
will do diesel test today and report back.
bubbazook2: thanks for throttle linkage info. had heard this before, will check today.
Biodiesel 300TD: unfortunately it's NOT the tank screen, did tank and screen clean out. even added a few extra larger holes in tank screen to allow SVO through.
ALL: will report back later after stealing car back from mechanic today to some of my own testing acc toall your thoughts.

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1982 300TD, 265k
1984 300D, 282k