What is this rubber thing?
 

I took off my air cleaner on the 300TD to adjust the valves. This
rubber thing was under the air cleaner housing. I cannot seem to
figure out where it goes.

My valves were way out. I thought it ran well before. Now it's superb.

That looks a lot like the rubber O-ring that connects your muffler and/or exhause pipe to the retaining hook on the bottom of the frame. There should be a couple at the back of the car and more near the muffler.

It's possible that the piece in question was placed (by a previous owner) between the air cleaner housing and valve cover to prevent the clatter that frequently occurs when the housing bangs into the valve cover.

I'd say both above answers are correct. Nice job guys!
It appears to be an aftermarket muffler hanger, and the reason stated above is its likely reason for being where it was.

I thought that's what it looked like
 

That was my first thought that it looked like a muffler hanger.
I'm new to the MB diesel scene though and some of those rubber
things that go around some of the hoses look similar.

Leftover parts are always the bane of shadtree mechanics:).
Then somebody throws in a herring. I thought ,damn, something
is gonna be rubbing on somethin' it's not supposed to if I leave this
part out. Thanks for the detective work folks.