Oh, yes! If the hydraulic suspension is like the self-leveling suspension in the wagons, there are nitrogen filled "accumulators" that act as springs. When the nitrogen migrates from the accumulators to the oil, as it eventually will, the ride gets harder and harder until the suspension is essentially locked -- the fluid cannot compress, and there is no expansion space for it in the accumulators, either. Only the tires provided any spring, so the rear bounces like crazy.
I'm not familiar with the hydraulic suspension, though, but I'd bet you don't have shocks like a spring suspension and that the accumulators, if you have them, are shot.
Bouncing the bumper will work fine to test -- if the accumulators are full of oil, only the tires will bounce, suspension travel will be very limited.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!