As for the 123 and 126 diesels with 617 engine, only the 1985 California model has the T.O. The Federal model does not have it making it the best of the years. Keep in mind that the 617 engine in the 1984/5 model has more power than the older diesels but it feels slower due to the smog control. The stock T.O. will go bad from time to time especially if the cars do not do much highway driving. MB would replace the T.O. with a new one for free in the past. The final recall replacing the T.O. with a catalyst should fix the problem. But the catalyst does clog up sometimes (very small chance but it happens) and you have to pay for it if the installation is over 12 months.
The 5 cyl 617 engine in 85 or older cars is trouble free. The 6 cyl engine in the 87D is a good engine but it dose have its share of problems. I think the '90-93 300D with 2.5L (5 cyl) is better. Living in California, I do not have much chance to test drive a 2.5L 300D, only once, and I found that the performance is very close to the 87 300D. Looking at the numbers from the book, 87 300D is about 10 second from 0-60 vs. 12 second for the 2.5L 300D, 14-15 second for the 85 300D/SD Fuel mileage: 28-30 m/gal, 34-38 m/gal, and 24-28 m/gal, respectively. 2.5L makes less noise and burns less fuel.
As for passenger space, the 124 body (such as 87 300D) will be very tight for 3 adults in the back seat, but the 123 (such as 85 300D) and 126 (85 300SD) have okay shoulder room for 3 adults in the back. 126 has more leg room than 123 body.
As for comfort, I like the 126, then 124, then 123. For some reasons, the steering on the 124 feels better than the others. I tested three 126 diesels (83-84 300SD) with 16 inch tires (stock is 14 inch) and they all handled as well as the 124 with stock 15 inch tires,or maybe even better.
[Edited by be459 on 02-01-2001 at 01:08 AM]