For what it's worth, I too installed KYB shocks on my 123 300D on all 4 points and would not do it again. They were fine to start but after 100K the car just didn't feel as tight as now with over 140K on them I feel they are in need of replacement.
I also understand the need for economy on the purchase, that is what drove me to buy the KYB's 4 years ago. Many have already responded that they did not like the KYB shock. I would say take others advice and check out the Boge shocks, they might be a nice middle ground.
1987 300DT 127K
1987 300TDT 283K (Sold)
1999 528iTa 75K
1991 300D 2.5T 214K - Dead Tranny
1984 300DT 375K (Sold)