Thanks for the responses folks. My car is a 1978 300D. From what I have learnt through available literature as well as physically comparing with a friends car, many of the details on my car are more like the W115 300D I tried a few things from the suggestions above.
My tires are about 1 month old, they were balanced when installed. All front suspension components were changed with Lemfoerder parts earlier this year.
I drove it on the flattest piece of highway I could find close to me today and think I have narrowed it down to two separate things.
1. Tires need better balancing. There is vibration between approx. 75 - 80mph, it goes away below and above that range. This I can get checked and if necessary, fixed soon.
2. My throttle control mechanism is like that in a W115, as in throttle pedal connects to a spring that connects to a rod that goes across along the firewall etc. Kind of like this
http://www.benzworld.org/forums/attachments/vintage-mercedes-benz/327370d1282910094-throttle-linkage-bushings-under-hood-30_002.jpg
except a few differences since this picture is from an SL I believe.
If you look at the picture in the link, I tried jiggling rod number 186 by hand and turns out I can move it from side to side about 1/2 inch with little effort.
I am assuming this is not normal and is probably because the bushing no. 138 is worn out. Given the way the engine normally vibrates, this much play in the throttle controls might be what I am sensing. Keep in mind, the play is side to side. About two weeks ago, i noticed my throttle pedal rattling so I replaced the plastic bushing (no. 54) behind it. It stopped the rattle but I definitely feel vibration on the accelerator pedal if I keep my foot on it at idle. Is it possible to disassemble this linkage? If so, where would I look for this bushing? I checked a few sites and I m not really even sure what its called. Most throttle linkage bushing searches result in bushings for newer 1980 + model year linkages, which are totally different from mine.
What do you folks think? Am I on to something or is this a negligible problem?
Thanks