The dimmer aka rheostat is bad on the cluster. You will need to remove the cluster replace the rheostat or simply bridge the two contacts which will eliminate the dimmer.

You will need to replace the stalk, quite expensive for a w115 but there are some DIY repairs floating around. It is very easy to remove, replace or fix.

The jumping needles can be from the switch, bad grounds or fuses. Have you opened your fuse box and replaced all the fuses with the copper ceramic versions? That clears up ALOT of electrical problems...the original fuses were made of aluminum...aluminum and copper don't meet well...add in 30+ years....heat and moister....not good...

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