Test-drove a 1980 300TD non-turbo diesel yesterday (220k miles). The 1st-to-2nd shift came very quickly (within three seconds of taking off) with a lurch, but the car stayed in 2nd for most of the time. It finally shifted into 3rd as we accelerated on the freeway, and much later on, it settled into 4th for a bit. On the streets, however, it seemed to stick to second most of the time. Is this normal? Or is this the cause for the car being amazingly sluggish?

The same guy is selling an '84 300TD turbodiesel (228k), and this seemed to be a totally different beast. Shift points were where one would expect them to be.

Both cars have sagging rears... The '84 more so than the '80. Will they get saggier with time or is there a certain point they will settle at?

Both cars are SoCal cars, and the non-turbo is $1200, while the turbo is $1700. The non-turbo is sprayed a non-factory red, and the turbo has a dent in the rear door, faded black paint and is missing a trim piece or two. Which is the better deal? What are the costs of replacement transmissions on either car?

You know, there is simply no way to tell you which is the better deal. Simply not near enough info.
I have an '80 and an '85 wagon. The '80 has a much less sophisticated tranny. You can't adjust it quite like the later models, but you should have better shifting than you described.
The red repaint sounds horrible, as repaints never match original quality. Of course, many repaints are probably better than 25 year old paint that is gone.
I don't know if you can, but what you need to do is find a wagon in better shape, and happily spend more for it than the two you describe. Believe me, you will spend much much more on them to get them to the point of a nice one that you would pay more for.
The sagging rear ends should not be that way, but they can be dealt with without major $. Don't get me wrong, you could spend major $ on the hydraulic suspension, but if you search and bide your time, and find nice folks on this forum, you can get the parts reasonably.
By the way, I love my '80 wagon, more so than the '85. There's just this smoke thing........

__________________
Jimmy L.
'05 Acura TL 6MT
2001 ML430 My Spare

Gone:
'95 E300 188K "Batmobile" Texas Unfriendly Black
'85 300TD 235K "The Wagon" Texas Friendly White
'80 240D 154K "China" Scar engine installed
'81 300TD 240K "Smash"
'80 240D 230K "The Squash"
'81 240D 293K"Scar" Rear ended harder than Elton John