A few things to consider:
- Most states require a designation to be placed on the title of a car that has incurred significant flood damage. This follows the car around for the rest of its life and will greatly suppress resale value, not only for the current owner, but for you, no matter how effectively (or expensively) you repair this car.
- Water immersion plays hell on a car when water enters oil pans, automatic transmissions (clutch packs hate water), differentials, hydraulic brake systems, etc. If the car entered the water briefly, and was IMMEDIATELY brought to a shop to drain and replenish ALL fluids you would have a fighting chance. If not, corrosion damage has already occurred in/on iron and steel components in these systems.
- Upholstery and sound insulation pads soaked by flood water and left to mildew will acquire interesting aromas that, sans replacement, cannot be effectively eliminated.
- Outside of other Mercedes models, I am at a loss to come up with another vehicle that has more wiring, sensors, switches and relays than a W129 Mercedes. All of these components are vulnerable to water damage and therefore a shortened life. Have you ever heard of Chinese Water Torture? The German variant involves the random (but premature)failure of these components over the next few years on a flood-damaged Mercedes.
In my opinion, the price is NEVER right on a flood car that is as complex and expensive to repair as this one will be. Run! Buy an older 560 SL if you want a Mercedes SL but don't want to (or can't) spend the money to buy a W129 that wasn't flooded. Even a 1990 300SL with 150,000 flood-free miles will be more trouble free and hold a higher percentage of it's value over the rest of its life than the car you are considering.
Good luck on your search for a good used SL. They're out there and affordable for almost any budget. Be selective, and you won't regret it.