I got my 76 300D a little over a year ago for about that price. Very little rust but it needed front end work(tierods, drag link, stuff like that). Within a couple months of slowly working on it, she became my daily driver. I have put 12K on it and it hasnt been a bit of trouble.

I say you should go for it, rust free examples are getting harder to find.

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1985 300TD Turbo Euro-wagon
1979 280CE 225,200 miles
1985 300D Turbo 264,000 miles
1976 240D 190,000 miles
1979 300TD 220,000

GONE but not forgotten
1976 300D 195,300 miles
1983 300D Turbo 175,000 miles

http://i42.photobucket.com/albums/e3...e485-1-2-1.jpg