George, I am averaging 27-29 mpg in my car. Down here in South central NJ, diesel is running about $1.35 a gal. From what I have read here, avoid the "rod bender" 350SDL. The engine that is in my car was used up to 1985. It has a cast iron head, whereas the later engines I believe switched to aluminum. A compression check seems to be the first thing you should have done. Find out when the valves were last adjusted, but of course this would go with reviewing maintenance records.
As far as the driving experience, that would depend on which car you get. From what I have read here, the diesels used in the W124s were very quite and smooth(for a diesel). When my car is running, you know it's a diesel. On the W124 diesels it sounds like a gas eninge that's a little loud. Once you are up to speed you don't really notice that you're in a diesel
1994 MB E320 Coupe (199,500 mi)
1992 MB 190E 2.6 (173,000 mi)
1983 Porsche 911SC (148,000 mi)
2004 Volvo V70 2.5T (198,000 mi)
President of CT/Westchester Section