I don't own one of these but your mileage seems a bit low - my cousin has an 87 300D wagon and as I recall he is getting 27-29MPG on the highway without A/C use.

B100 is also not quite as fuel efficient as straight Diesel fuel, as I recall its was about 5% less that Diesel? That might account for 1 MPG or so...

Have you checked the timing and chain strecth? How does it run?