It's definitely not too tight and is probably too loose. The general rule of thumb, and the way most shops do it, is to tighten the nut while turning the wheel until you can't turn the wheel anymore, or nut whichever happens first. Then back up 1/3 of a turn and tighten the allen. Then, give the end of the axle a good whack with a hammer to release the bearings. When I changed my LBJ's I called all around and was given the same procedure from shops specializing in MB's as well as the MB dealership here.
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1982 Mercedes-Benz 300CD
1982 Mercedes-Benz 240D - stick
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