If I were you, before doing any major work, I'd run dry the veg tank and put diesel in it and see if you still have the significant power loss running on diesel out of the veg tank. If not, then is a plumbing / clogging issue in you switch over valves. Clamp off one of the veg coolant heater lines so you are not heating the diesel. For short runs, you don't need to do that.

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85 300D turbo pristine w 157k when purchased 167,870 July 2025
83 300 D turbo 297K runs great. SOLD!
83 240D 4 spd manual- parted out then junked