This isn't from personal experience, my guess is that a well done installation of modern sound deadening material would make a dramatic improvement in a W123 240D because the old technology OEM material probably aged out over 20 years ago. Use the best and thickest you can afford on the firewall and transmission tunnel to combat the noise produced by the high revving four cylinder diesel.
Had a '78 240D manual, it was an awesome car.
Please post your results.
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