look up B2 piston repair.
classic symptoms of a b2 piston leaking.
I just did mine, and it is not bad a job in a 126... on the 123, it's a bit tighter a job, but it's doable.
CLEAN the underside of the car first.
Phil has all the parts, give him a call from the "buy parts" link above.
you might wanna call roy at the same link, and talk to him first... ofcourse he's gonna want you to pull the tranny and put it on a table to do the job.

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John HAUL AWAY, OR CRUSHED CARS!!! HELP ME keep the cars out of the crusher! A/C Thread
"as I ride with my a/c on... I have fond memories of sweaty oily saturdays and spewing R12 into the air. THANKS for all you do!

My drivers:
1987 190D 2.5Turbo
1987 560SL convertible
1987 190D 2.5-5SPEED!!!

1987 300TD
2005 Dodge Sprinter 2500 158"WB
1994GMC 2500 6.5Turbo truck... I had to put the ladder somewhere!