Russ,

If you've got a USA model 4matic from '88, you've got the M103 (177 hp) vs the M104 version. The M104 was a 4 valve head and the M103 had two valves. Also, at that mileage it would be hard to believe the transfer case hasn't been changed out already. The orignal xfer cases lasted on average about 75 k miles. the updated version supposedly had a better design with a steel sleeve in the operating piston's cylinder to prevent the leakage that doomed the originals. That being said, I know other 4matic owners who have replaced their xfer cases several times.

You mention no catalyst. If it's a Euro version does it show km's or miles on the odo? Are you in the US or in Europe?

The car is wonderful to drive if maintained properly. First thing I'd do is "renew" all fluids: brake, tranny, xfer case, rear diff (use MB Limited Slip Fluid), coolant, and oil if you don't know when it was changed last. Ensure the front end is straight and all the brakes are good. Valve guides are probably ready for a change. The seals can be changed, but at that mileage I'd expect the guides are worn and you'd get little life out of the new seals with the valves wobbling around in worn guides.

Check the repair order for the "Autobox recondition" and see if it was the tranny or the transfer case. If the tranny was rebuilt, hopefully they knew what they were doing and replaced all of your friction plates and wear items.

Good luck!!

someguyfromMaryland