The hydraulic suspension merely gives a slightly softer ride (note that the spring rate is actually very similar, not softer) with much greater damping. Handling should be very similar if not better due to better tire contact. Roll is controlled by an identical sway bar.

Check the links for the swaybar, too -- if one is off, you will have rather shocking body roll.

I would also bounce the rear end while watching the tires and wheels -- if the rear suspesion is very stiff and movement is mostly tire deformation, you need new accumulators, the ones in there have lost their nitrogen (2000 psi or so) charge and are preventing wheel movement -- strut travel forces the oil into the accumulator where the compressed nitrogen acts as a spring. When the nitrogen is gone, the strut cannot move, and the tires bounce. This will eventually cause the tires to come off the road on bumps, quite an experience.

I'll bet you also have completely wrecked torque links. Easy to check, just set the parking brake, jack a rear wheel up, and apply torque with the lug wrench. If the wheel moves forward or backward, the links are shot. The wheels will move an inch or more if the inner torque link bushing is missing, as mine were.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!