Would you - New Car with payments or restore/semi-restore your Diesel ?

[AdvisorGuy]

I was talking to a close friend a few nights ago while I was driving a customer's Audi A3 home from work. As we were talking - my stating that I may find myself a certified S4 2 years down the road - the EPC light came on and the car could barely maintain 60 mph in 4th, 5th or 6th gear. This being the 3rd time it's happened to the customer. My buddy said something that I can't get out of my head. And I quote:

"Why the **** would you want to get something newer ? If that 1 year old Audi was MY car, and I gave it to you to drive to Texas instead of your 24 year old 300SD, you'd have been stuck in Tennessee at 3 am and would have called me to tell me you set my piece of **** car on fire. If you really have the need to get a new car, sink $20,000 into that car and restore it. Hell you could probably make it look like new for $10,000. Don't be stupid like me. Anything happen to your diesel besides the junk yard a/c compressor seizing after driving it for 27 hours straight ? No. Don't be stupid."

This begs the question - Would you do what Elais suggests ? I'm seriously considering it. The car needs paint - what gray anthracite Benz doesn't. Rust exists at the right tail lamp, a 4 inch stretch in the left trunk channel and under the rear glass. I got a quote of around $6000 to rectify all that with repainting the whole car and replacing the rear glass. Think it's safe to think that I can redo the dash cap, wood trim, headliner, package shelf, door panels and seats for around $4000 ? More ? Less ? The carpeting is in good shape - maybe just remove it and clean it while the interior is being done. I'd do as much of the work as time and space would allow me to. The car just turned 241K and only has a few minor mechanical issues.
-Snapping sound from left front when I come to a stop
-Left Rear wheel bearing noisy sometimes
-Fuel & temp gauges sometimes dancing around
-Tach intermittent
- Sunroof sometimes binds - rectify that when replacing the headliner
-The aforementioned siezed a/c compressor

On the PLUS side - the clock hasn't worked since I got the car. Since I've been in Texas, it works. And I thought Christine was a '57 Plymouth Fury...