I have much the same dilemma I have a high mileage 190dt with a bit of rust but lots of age related issues. I can work away at them but they will never go away completely. I just spent 2 days under the car changing the transmission. Driving it reinforced the feeling that I have that this is one of the nicest Mercs that I have owned. I would not make a hasty decision about the car. I have seen locally several very nice 190e 2.6 gassers in the $500 or less range with blown engines or transmissions. This would make the ideal swap candidate but has the result would be a nice daily driver but have little collector value. On the other hand it would be expensive but not impossible to repair the rust. Pretty much a frame off resto would be required. What would the vehicle be worth when you are done. $6000 ? $8000? perhaps but my experience is that Mercedes diesel guys are forgive me quite cheap! On the other hand if you were to stop the rust with Rust Mort or some other product and do a half assed bondo job maybe a bit of metal patching , paint the ugly bits reasonably well Maaco or some such, you would have a fairly nice looking daily driver for at least 5 years at which time you could re evaluate your commitment to the vehicle and do a better job or just clean it up again.
I am looking at some variation of this strategy for myself. I have had a half dozen 190s gas and diesel in the last couple of years and the 190dt pretty much hits the nail on the head as a really nice daily driver. You would be hard pressed to find a more practical fun Eurodiesel. Cheers and good luck Dan

__________________
It's always something simple
91 300D 603.960 (from japan) 194K
92 Toyota Diesel Landcruiser HDJ81-t 116K
02 Golf TDI new head courtesy of PO
87 300D
97 BMW 525 TDS Wagon 5spd
bunch of Onan and other diesel generators