Starter Question
 

It was cool out yesterday (41F) and the old 240D did not want to start (I think I need to replace/upgrade the glowplugs). Anyhow, after cranking for quite a while, I let go of the key and it turned back to the on position, but it sounded like the starter kept spinning (not turning over the motor). I turned the key all the way off before the starter would quit spinning.

Does this sound like a bad cylenoid (sp?) ?

Yes.
 

To answer your question = yes.

I would pull the starter, it probably needs other service at the same time.

You may also have run the battery down. A low battery can cause a solenoid to stick. On the mercedes starter though, it's usually after damage has been done. :(

I have said it before, and I will say it again. I am convinced that weak batteries kill MBZ starters.