On my car, a '95 E300 Diesel, the exact noise that you describe end-up being the Passenger side rear control arm bushing. The part is about $40.00, but is hard to get to. it took my Indi, about 2 Hrs to remove the rusted old one and install the new one. 6 Months ago I had to replace the rear driver's side bushing for the same reason. More expensive than almost any other bushing work in the rear, but much cheaper than new shocks.

He diagnosed it by lifting the car and listening with his stethoscope. That's the only proper way to do it.

Phil

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'95 E300 Diesel, 264,000 Miles. [Sold it]