Look at your linkage from the cruise servo to the throttle linkage,any excessive loose play can cause that as the servo tries to control the speed and due to lost motion in the linkage ends up over correcting in one direction which causes more of a change in speed than was called for so then over corrects in the other direction and repeats, when my car was doing that it was always worse on level ground than going up hill.Another possibility might be a touchy brake light switch,as you may know 12volts applied to the brake lights is what shuts off the cruise when you step on the brake,but i dont think it would come back on if that were the case it would just be off until you switched it on again. Don

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97 E300D 157000 miles
87 300TD ?141k? miles