The AC will work OK with R134a. Don't charge to the weight listed for R12, use 85% (this is really the same amount since R134a weighs less). Over charging will reduce low speed cooling, and you may loose some idle cooling anyway. If you get a new compressor, it will come with R134a compatible oil in it. You will need to flush all the oil out of the old system.
Re-seal the steering box, there is a kit on Fastlane, I think. The seals leak with age (much worse on the W108 chassis, too close to the exhaust).
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!