It is good to hear that the accident worked out that well for you. It is never fun to get caught in an accident and it doesn't always turn out well in a financial way.
The head problems are not caused by overheating...some of them just crack. Only last month I have seen the following engine problems:
1996 Sprinter 312D/120.000km (a van with 5-cylinder turbo diesel engine and 120hp): cracked piston rings
1997 Vito 108D/80.000km (a van with 4-cylinder non-turbo engine and 80hp): blown head gasket
2000 Sprinter 316D/25.000km (a van with 5-cylinder turbo diesel engine and 160hp): cracked head
1996 E300D (6-cylinder non-turbo): brought in yesterday, but at least a blown head gasket
If the US models are have a different set-up and do not suffer these problems regularly, it is positive information. (my engine is a 605 and I don't know the engine# of the W201 and W124 5-cylinder diesel).
If the car you are looking at is in a good condition, you can certainly give it a try. The average W124 diesel is good for a lot of (comfortable) miles...
with a minor 600+k