I would appreciate some advice please!

Car is a 1992 UK 300D W124 (straight 6, non turbo) in daily use, with 160,000 on the clock, good oil pressure and no more or less rattly than any other 300D. Generally it runs well.

I bought the car four-ish years ago at 116,1000 (and let me say it's the best car I have ever owned). Anyway, with the transmission in park, if I revved the engine to, say, 3000 rpm and then let the revs drop, they would fall to 500 and then quickly come back up to 650. It was possible (but difficult) to stall the car by, for example, letting the revs drop with the power steering on full lock. I had some suspension work carried out by Mercedes-Benz at this time and asked them to raise the idle speed slightly, as I felt that this was indicative that it should be higher. They said that there didn't appear to be any way to do this. This seemed odd to me. They also did not appear to be very knowledgeable about this car though...

Around a year ago (yes, I know!) the idle speed started to fluctuate. It would drop from 650 rpm to 500 rpm, and then jump up suddenly to 650/700, before settling. I think it happened when it was cold and it certainly happened when the engine was hot. (An interesting experience with auto transmission when sitting in traffic!) A few minutes later, and it would do it again. It seemed to do it more when the oil was towards the lower end of the dipstick and less when I topped it up, although this may have been my imagination. When it jumped back up, it was far faster than I could possibly make the revs rise by pressing the accelerator, it was almost an instant jump. It did this for a couple of months.

Then it stopped doing it. The revs have dropped permanently to 500 rpm (and dies on idle when the engine is cold). I was busy (or lazy) and certainly didn't have money to have it investigated, so I became an expert at driving it with two feet and it hasn't bothered be in the slightest for the past year/10,000 miles. However, I would really like to get to the root of the problem and I would appreciate any suggestions as to diagnosis/repair.

Very many thanks in advance.

John.