If the rust on that car was only superficial, it might be worth $1000, but you said that the rust had caused a 'missing part'. this sounds more than superficial, and doesn't reassure me as to structural integrity, or the condition of the floors and seat/seatbelt anchors.
The part about being hard to start is also troubling, though you said it started right up with the seller's other battery. Hopefully it's the battery and not a faulty glowplug system or tired engine. These diesels take an oversize battery that costs in the $100 + range, so budget accordingly.
My 240Ds have no block-heaters, but start easily on the glowplugs down to around freezing. By 18 - 20 F, I may have to go through a glow & crank cycle at least a couple times to get them running. But when it's that cold, I normally take my gas vehicle - no sense in stressing out my old diesel's battery or starter.

Happy Motoring, Mark

Wow, far less of a figure than I had expected. Perhaps for all practical purposes it's simply an overpriced car then. I'll still go look at it, but chances of me taking the deal are looking bleak. I'll still look at it and try to give it an honest inspection and make an offer according to what it should really be worth. I'm expecting to make an offer anywhere between $800-$1000 depending on the outcome of my inspection, should I decide to even go with it.

I get the impression the person selling it just doesn't know much about the car. He seems to know enough to get by, but perhaps he believes he is sitting on a car which is highly sought after by people who restore old cars. I wouldn't consider a W123 chassis car rare by any means though.

Thanks for your advice, you may have just saved me tons of hard ache and money as well.

Well, I got to go and check out the car in all its glory this morning. I was able to do this without the owner, so I wasn't restricted/distracted at all in my inspection. That really helped I believe. If you'd like to skip all of the writing I've done, I made an itemized list of concerns at the bottom of this post.

It was actually a pleasant surprise. The car body itself as I suspected is in pretty good shape, and all rust appears to be superficial with a couple of exceptions. Thanks SO much for your advice Mark, it came in extremely handy. The driver side seemed to have no rust, and under the floor mats and carpet I was surprised at the cleanliness of the vehicle. I checked around the bottom of the seats, and the drivers side had no rust that I could find. The passenger side, however, did have a little rust. I picked a piece off (perhaps it could be a coating of some sort?) and it looked to be about 3-4 hundreds of an inch in thickness, pretty thick (compare to say the thickness of a dime, perhaps a bit smaller). The seatbelt itself was still secured in the metal, however and the rust didn't appear to be out of control at this spot.

Then behind the seat, I was able to spot out a weak part in the rear right passengers floorboard. If pushed from the bottom, the floor did move. While I didn't want to push too hard, I wasn't able to determine if there was actually a hole there. Another area of concern is the battery tray. Someone instructed me to check the battery tray for rust, and see if the rust was spreading to the firewall/fender well. The tray itself was about half way rusted out completely. The left side was nearly all rusted out, but the firewall and fender from what I could tell have not yet been affected.

It was a great morning for testing cold starts. It was cold enough to have a nice sheet of ice covering the windshield and could easily see my breath. I went directly for taking the battery out and putting mine in its place, so that I wouldn't give the glow plugs and engine a chance to warm up trying to crank it on the bad battery. The first try, it did start (guessing 3-5 seconds of cranking), but the engine soon after died. I decided to try it again and this time gave it a little gas. It started right up, and I did wait for the glow plugs to prime (took about 5-6 seconds). In the beginning, it sounded like there was a few pings here and there (diesel trait, I assume) but after running for less than a minute, it was idling like normal, smooth with no requirement for giving it any gas to stay alive.

The oil pressure was good, as suggested it pegged as soon as starting up and stayed there during the times I noticed it. I forgot to check while driving/after warm, but I believe it's OK. I checked for blow-by, and there definitely is some blow-by. It didn't appear to be a problem though. When placing the cap on the top of the hole loosely, it bounced around but didn't fall off. I would say the highest I saw it bounce was a half of an inch from the engine.

There IS green anti-freeze in it, and there are like 8 bottles of anti-freeze in the trunk of the car. The owner had said there was a problem with the radiator being clogged, so he changed the radiator and water pump. Radiator did not look new, so if it was changed it must have been salvaged. Brake fluid was new yellow looking, very good condition. Brakes were a little crappy, a bit difficult to push the brakes down and the pads didn't seem to be stopping me too well. If I really wanted to push them to stop I could, but I certainly don't trust these brakes out on the interstate.

I could not find the suspension bushings :(. If anyone can give me an idea on how to find/see them, please let me know. The suspension otherwise seemed good. The rear CV boots were actually in surprisingly good condition. Didn't even appear to have much cracking/dry rot at all with no visible leaks. I couldn't get to the drive shaft and center bearing. Any suggestions for doing this with no jack? There was a bit of an alarming marble type sound coming from the rear of the car between the 2 back tires. I believe it was loose exhaust/heat shield but couldn't be for sure. Thoughts?

The steering actually seemed OK to me, but there was a distinct but not loud pop when changing directions in steering.

So, to sum it all up in a neat little list:

Concerns:
- Rusted back right floorboard, was able to be pushed up from under the car
- Some rust around passenger seatbelt anchor, may have been a coating coming off? The anchor seemed to be secured well to the frame and wasn't rusted out completely.
- Leak at top center of windshield, looks like the gasket around the windshield is about shot.
- Ash tray rusted, quite ugly looking but didn't appear anywhere else around the ash tray oddly enough. May be due to the small leak in top-center of windshield.
- Trunk had rust in it, on the under side of the hood, and on the floorboard. The rust in here did not seem extensive and no rust through was found.
- Blow-by seemed just a touch above average but I've never tested for it before so I may be mistaken. Did not blow off oil cap.
- Black oil, did not seem gritty but close. Wasn't low/high.
- Oil appears on under side of hood, as if it has been sprayed. Looks like a stain. Appears to be coming from a failing hose going into the valve cover.
- Some black oil may be coming from just below the fuel injection line things right where the valve cover meets the engine (sorry, new to diesels lol). It was very difficult to determine for sure, may be a false alarm. This can be seen somewhat in the picture #26 at http://picasaweb.google.com/roadjake/Mercedes
- Rear defroster not working
- Suspension made a soft 'pop' while turning sometimes. I could tell with a good bit of certainty that it had to do with the steering itself. Steering did seem a touch loose, but wasn't bad. (Mind you my primary vehicle IS a Ford Explorer though, which has plenty of play in the steering so I may just be used to it)
- When revving the engine, it appeared to "lag" when returning to idle. Sometimes, especially while driving, it seemed to even stick until engaging the clutch. I suspect diesel trait but was unsure.
- When first started had a few sounds that I believe were pings, another diesel trait?
- Marble-in-can type sound coming from middle-rear of vehicle. I suspect muffler/heatshield, but perhaps it could be something else?

I believe that's about it. Sorry for such a long post, hope that it's OK I posted all of this. On the up side, the full size spare seems like it's in very good condition with a minimum of 40% tread life remaining. Also, I thought I was going to get into a car that was the weaker than a go-cart by all the trash talking people do about the 240D. I was very comfortable with its ability to 'get up and go'. Perhaps merging at high rates of speed the acceleration wont be there, but the car at low speeds felt very responsive.

I was considering offering $1200 since I will be making payments, wanted to give him a bit more. Anyone agree/disagree with that offer? You think maybe if I wait a better one will come around for cheap? Time is somewhat of the essence here, so this could be my only chance at one for now, but I wont make that my determining factor. Having said that, I would actually prefer a wagon though. BTW, Mark, your estimated worth of $1000 is accurate I'm sure, and after inspecting based on what you said this car is probably worth $800. I am willing to pay a bit more though because, well, I've never been able to find these cars for cheap haha. And the guy is being nice about me not having the money so that is worth something to me.

I have no complaints driving my stickshift 240D on the highway. My automatic 240D runs OK at highway speeds, but it's engine revs higher due to inherent slippage in the automatic, and it's noisier due to a missing hood insulation pad, so it's not my first choice for long trips. Either 240D's lack of power is mostly felt when trying to accelerate uphill.

There should be a paddle-shaped speed-control knob below the instrument cluster. You turn it counterclockwise to raise the idle speed on a cold engine.

Happy Motoring, Mark

IMO, you have described a sub-$1000 car. It is not one that I would want, but everyone has thier preferences and timetables and not all markets are the same. The front suspension/sterring issues will be expensive to correct.

Thanks again for all of your help. I think I will pass on it. As much as I would love to get it, I don't have the money to overpay for a car especially one that may need extensive work to get up to par.

Thanks again for all of your help. I wouldn't have known nearly as much as I do now without the help of you guys and the forum. I have through this compiled a complete checklist for checking out one of these cars. I will post it in a new thread as a return favor for you guys helping me :D. Thanks so much guys, I truly appreciate it.

Edit: Here is a list of the checklist I've begun to compile. Please add your input if you don't mind :D

http://www.peachparts.com/shopforum/diesel-discussion/236406-inspection-checklist-buying-older-mercedes-diesels.html