My odometer is inaccurate. It didn't work at all until I fixed it last month with the DieselGiant method. I checked it against a known distance tonight and it turned out to be like reading 80% actual mileage. That scared me! At first I thought it was an engine problem!!! Actually my mileage is great!
I have heard that the W123 class suffers from this.

My '85's odometer is very accurate. Surprisingly so... 210K miles.

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1985 CA 300D Turbo , 213K mi

Just an idea. How is the condition of the speedometer cable?

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'81 MB 300SD, '82 MB 300D Turbo (sold/RIP), '04 Lincoln Town Car Ultimate

Sooner or later every car falls apart, ours does it later!
-German Narrator in a MB Promotion Film about the then brand new W123.

I think its binding because the speedo works funny too...

Have you taken it apart to look at the gears? When my plastic gears started failing, they seemed to be catching and releasing several times per second causing the speedo to jump. I assume it was causing the cable to "wind-up" and release. I disconnected the cable until I got home to fix the speedo gears because I was afraid it would break the cable.

I have the jumpy needle disease when im going under 20. I may have to measure what the distance somewhere with another car and check.

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91 350SD
14 F150 Eco
19 Fusion Hybrid
11 GT500