My 87 300sdl had the same problem. Has your coolant overflow tank turned brownish black instead of clear and can you see small oil droplets floating in the water? Do you have oil leaking out of the side of the motor around the turbo?

My #14 head gasket was blown. Same symptoms. I was also overheating. I went to junkyard and found full motor with #22 head for $160 out the door. I took head off and sent it to machine shop and got valve job for $300. Had him replace the stem seals also. The rest of the gaskets and such cost me about $500+. Runs like a champ now. You can clean the reservoir off the car with gasoline and it gets most of the black out.

Also look at the clips and shims that hold down the injection lines from the pump to the injectors. I didn't put these back on when reassembling and cost me 8 lines @ $50 each before I replaced all the fasteners. They will vibrate and leak if not properly secured.

Control arm bushings. Do not buy these and have shop install. Buy the whole control arm assembly. Cost me a lot more in labor to change them out then the added cost of the whole control arm.

Use diesel purge on the engine and replace fuel filters after. I think superturbodiesel has a how-to using a couple rubber hoses and an empty juice bottle. I do this at least once a year.

Do not ever buy any parts manufactured by Uro. Do not ever buy Meyle suspension parts. Some Febi parts are junk too.

Replace all vacuum lines. Delete egr and emissions equip under airbox. DIY online for this.

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1987 300 SDL
2000 E320 Wagon