Aaron is right, definately go for a W123, 240D or 300D, you will not regret it. You may also want to consider an older W115, 240D as well. To me, the W115 is a more 'shapely' body style... and they are usually a lot cheaper.
The diesel motors will run almost forever with normal maintenance and a little TLC.
$4K should buy a good car from the '80's or shoud leave enough left over for repairs if you get one from the '70's
76 240D - 550K miles
78 300D - 200K+ miles