This is my response to an e-mail with some further questions from Linda. I wanted to post it here as well, for the benefit of anyone else who may be following this. It's just more general information, so I hope Linda won't mind.
I'm not sure exactly what year they started with the aluminum heads, but I think it was mid-late 80s on the W126 chassis cars, such as the 300SD. Any 300SD from 78-83 or 84 will be all iron, I'm sure, as well as any 300D or TD...there may be an exception, but I don't think they ever put the aluminum heads in those cars. They are all VERY sturdy cars if well maintained. The six cylinder, which can be found in certain late 80s/early 90s models, is a good engine as well, and offers slightly better performance, but is not the "workhorse" of durability and ease of maintenance that the 5-cyl. is. My personal favorites, for a lot of reasons, are the 78-79 300SD, and the 82-85 300D or TD.
Concerning mileage, with diesels actual mileage is not as significant as diligent maintenance. Try to find a car with good maintenance records, receipts, etc. Preferably done by a MB dealer, or reputable independent shop. If the person was a do-it-yourselfer, like many of us on the shopforum are, I'd ask a LOT of questions, look at their other cars if possible, etc. Some folks are competent to do their own maintenance, some are not. Records of regular oil changes, filter changes, etc. are indications that the owner took pride in his/her car and did the maintenance neccessary to give the car a nice, long lifespan.
Another member on the shopforum is fond of saying, "There's nothing more expensive than a cheap Mercedes!" Buy the nicest, best example of whatever model you choose, that you can afford. Rescuing a poorly maintained car will be far more expensive, in the long term, than buying a nicely cared for car in the first place. Often a visual inspection gives a lot of clues as well...If the car looks questionable cosmetically, such as lots of small dings/scrapes in the paint, missing trim, ragged interior, excessively dirty engine, etc...that is often an indicator that they were equally carefree with maintaining the engine. There are always exceptions, but that's a good place to start.
It is not uncommon to see the 5-cyl. diesel cars with 200,000 or 350,000 or even over 500,000+ miles on them, but still running strong and looking great! My 79 300SD has 245,000 miles right now, but runs like new, looks great, starts easily, almost no smoke, etc...It's all in how well it's been cared for. Incidentally, my car came with NO maintenance records (previous owner says he lost them), but I could tell from the overall excellent condition of the car, mechanically and cosmetically, that it had been cared for. Mercedes actually offers free award badges to put on the grille of your car when you reach certain milestones of mileage...I have a 500,000km badge on my car right now.
Certain things to look out for:
Excessive smoke, either on start-up, or while driving. Expect an older engine to smoke a little, but large amounts of smoke can indicate numerous problems.
When the engine is cold, does it start easily after waiting for the glow light to go out? If not, that could indicate bad glow plugs or relay, low compression, valves out of adjustment, etc...
Does the heat and air conditioning work? These are notorious problem areas for Mercedes of any kind, and can be a very expensive repair if everything is not working properly, so check that out thoroughly.
On a car with over 120-150,000 miles, have the suspension checked out, front and back. This is usually about the time that such things as bushings, ball joints, shocks, etc. will start to wear out, and if they have not already been replaced, you will experience premature tire wear, sloppier handling, harsher ride quality, all of which will only get worse over time. These items can add up to an expensive fix as well. That being said, even a Mercedes with a worn suspension still handles better than most cars of the same age. My SD needs over $1,000 worth of front-end work done right now, but it still drives wonderfully, with the excessive front tire wear being the only real annoyance right now.
Do the power locks work properly? Does the engine shut off immediately when you turn the key off? Is the brake pedal solid, but not excessively hard to push? Any of these things malfunctioning can indicate vacuum system leaks, which often can be pretty cheap to fix, but a pain in the butt to diagnose.
RUST. Avoid a car with any significant rust. Rust is car-cancer. Once it starts, it is difficult if not impossible to stop. Cars that have lived in northern climates are often very bad. Check under the carpet mats and in the trunk for water. If the car has leaky windows/trunk/etc., then if it's not already rusty, it will be.
Also, look for obvious things like coolant leaks, dried/worn hoses and belts, oil leaks--any old diesel will leak a little oil, but it shouldn't be all over the place.
Well, that's about all I can think of now.
Good luck, and feel free to write again if you have any other questions.