How far down did you run the nuts on the top of the shock? They should only be as far down as it takes to get a thread or two showing on the top nut, or the equivalvent distance if you have only an nylock locker nut. If you run them down til they are "tight" the cars gonna ride really hard, the rubber will be completely compressed and cannot absorb any roughtness. If too tight, just run them back up.
I did this on the 220D, rides way too hard, but didn't fix it -- I'll replace the cheapo Gabriels with Bilsteins if I can save it.
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!