$5500 is way too much for a car in that condition. You say the dash is cracked, is it a blue interior? My '87 TD is white with a blue interior and it's dash is cracked. This happens to ALL blue dashes. As it has been mentioned, prices for these rare cars are all over the place. I say rare because MB only made 2,386 of these cars in 1987. That was for the world, I don't know how many of those came here in '87 which was the only year MB brought the turbo diesel wagon to the US in the W124 body. I bought my "87 TD this past May, and only paid $3K. I have been told by fellow MBCA members and past W124 TD owners that I got the deal of the century, considering the condition of the car. I occasionally look at E-bay, but you don't find too many of these cars there, never mind the local papers. As for using NADA, Edmunds, KBB, etc. that can be miss leading when it comes to old cars like these. Look up a late 80's 560SL and you will find the values are about $5K-$10K lower than what these cars are going for on E-bay and in the local papers. The previous owners of my W124 TD were asking $3,500, which was about "book value". However as I mentioned, fellow MBCA members said, they didn't realize what they had.

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1999 MB SL500 (110,000 mi)
2004 Volvo V70 2.5T (220,000 mi)
2014 Tesla Model S 85 (136,000 mi)
MBCA member