There are two sources for oil in the engine -- bad vacuum modulator on the transmission and blowby or valve seals in the engine.
Check in the air cleaner for oil -- the blowby is routed into the center (clean side) of the air filter by the big molded hose from the valve cover. If there is considerable oil in there, you have a blowby problem and will need a replacement engine or overhaul.
If there is little or no oil in the air filter housing, check the vacuum modulator on the transmission -- an incredible amount of transmission oil can get sucked up that little vacuum line, and will make blue or white smoke.
Quite a bit of oil can go down the valve guide seals. This is usually most evident at idle and on startup.
My 88 TE respondes very nicely to throttle input. I suspect that if you have serious throttle lag most of the vacuum lines in the engine compartment are bad and leaking. Throttle lag and rough running are an indication of a vacuum leak.
Empty, your TE weighs about 2500 lbs. Gross vehicle weight is 4500 lbs, I think. It's geared rather low, should go like a scalded cat!
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!