Well, I predict that this message will get at least 15 replies...
Anyhow, you have to ask yourself if you think that the car is worth repairing. If the body and the rest of the car is in nice shape, and if you are satisfied with all aspects of the car, then by all means, get it going again. As far as which route to take, that's all up to you. Repairing the engine could cost near what a full rebuilt exchange would run. Just for comparison, the price for a full rebuilt longblock engine for your car would run $5,100 from Metric Motors in Canoga Park, CA. A shortblock would run $2,600. Shortblock meaning without the rebuilt cylinder head. If you want to give them a call, their number is: 1-800-622-6867. I have dealt with them before and found the quality of their work to be very good. They only do Mercedes engines, so they know what they're doing. Anyhow, good luck with your dilemma! Let us know how it goes!
Precision Motorcars, Cincinnati, Ohio
'67 250SE Cabriolet
'93 300E 2.8
'74 Jensen Interceptor Mk.III
'81 DeLorean DMC12
'85 BMW 745i Turbo