I'm not qualified to answer that one!
Diesels do have some peculiarities, but most owners love them -- a few horror stories, but that's the case with any car.
I'd drive some diesels before you start any serious shopping. You may or may not like them.
Post your query in the diesel discussion, the guys over there really know their stuff.
It sounds like a lot has been done to that 420. Have the car checked out by an experienced Mercedes mechanic and negotiate from there. Not sure about the records. You should be able to get them from the dealer by supplying the VIN #.
Anyone else here have any ideas??
Let us know what transpires!