I had a 1967 250S with 187,000 miles suffer a series of severe overheating episodes, none resulting in siezing the engine, but it did cause the head gasket to give up abruptly one day. I pulled the head, had it rebuilt and reinstalled it. Got the car running good, and lent it to a family member. The person driving was under the impression a stream steam from under the hood was the result of running through puddles and water filled potholes, and never stopped to look to see a heater hose had ruptured and all the coolant was being blown out. He only saw the end of the event when he slowed down and then the engine siezed. He rolled into a gas station and called me with the news.
I showed up about a week later, ready to tow the car to my in-laws place, but decided to give it a jump start attempt. Fixed the hose, put some anti-freeze and water in it, checked the oil, added a quart or two, and hooked it up with jumper cables. It turned over to my surprise, and without really straining the battery in my 1975 240D, it fired up. I drove it to my in-laws, changed oil, let it idle.
Seemed to be able to hold temperature and pressure, no oil smoking, so I drove it from Albany, NY to the Long Island shore in CT. No problems. I drove it for another year or so, but my wife decided it was too big. It had a 4 speed manual on the floor, and no power steering, just a huge steering wheel, kind of unique but got traded for a BMW 2002tii. Which lasted about three days. Another story.
Anyway, I think these cars are pretty robust, or at least some are. The in-line 6 with an iron block and aluminum head on that car was extremely robust, and the more current models can trace much of the engineering back to those machines.
Rebuilding or replacing is up to the owner, but I would be inclined to want to look inside before springing for a new or factory rebuilt engine. Good Luck, Jim
1986 Euro 190E 2.3-16 (291,000 miles),
1998 E300D TurboDiesel, 231,000 miles -purchased with 45,000,
1988 300E 5-speed 252,000 miles,
1983 240D 4-speed, purchased w/136,000, now with 222,000 miles.
2009 ML320CDI Bluetec, 89,000 miles
1971 220D (250,000 miles plus, sold to father-in-law),
1975 240D (245,000 miles - died of body rot),
1991 350SD (176,560 miles, weakest Benz I have owned),
1999 C230 Sport (45,400 miles),
1982 240D (321,000 miles, put to sleep)