I am not sure that I agree with the shop diagnosis, but swapping a valve body isn't hard, and if you can get one at a u-pull-it type place, shouldn't cost you very much. It might be valve body, or it might be loss of friction material somewhere like on a band. Still, one would think that at 163K miles you shouldn't see that much wear on a 240D....

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80 300SD (129k mi) 82 240D stick (193k mi)77 240D auto - stick to be (153k mi) 85 380SL (145k mi) 89 BMW 535i 82 Diesel Rabbit Pickup (374k mi) 91 Jetta IDI Diesel (155k mi) 81 VW Rabbit Convertible Diesel 70 Triumph Spitfire Mk III (63kmi)66 Triumph TR4a IRS (90k mi)67 Ford F-100 (??)