Broken cam shaft on 240D and what I found
 

I took the head off the 240D and found this
Boy it's hard work when you are 77 to pull the head on a 240D. But with a little help, I got it done this morning. Still is a difficult job with the PS pump and every thing else that has to be moved. Well, the PO told me the cam broke at speed and that was obvious. Number 5 lobe from the front, and it cracked right through the lobe. PO said he could not turn the engine and I believed him. I think now I should have tried harder, but I didn't and perhaps couldn't have. But on pulling the head, we can find no damage. Not a mark or a scratch, nothing at all in the block or bottom of the head or the valves. True the cam is very broke, and the center tower broke in three pieces. Cylinder side walls look and feel perfect and piston tops look new.
Now what could have caused this damage. Well in removing the head, we found that the three cap head screws that go down below the cam gear were missing and obviously had not been installed. The fourth screw that fits through the hole in the head, but not in the cam gear cavity, was in place. It also seemed that the torque required to loosen the head bolts varied an awful lot. A couple were extremely tight, most broke out very easy.
So my thinking now is to stay with the 240D. I am looking for a great driver and I had a pretty new 69 220D with a four speed and loved it. Everything is fast compared to my school bus, plus I have my awesome 300E 5 speed. This car has a fabulous paint job and a great interior, and with a good running 240D, I think it will make a great driver. I found out working this morning just how old I am, and I think I can save my self a lot of work. I think I will be happy just to put a good used head on it or a good used cam with towers if Tom W can find some..
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Even if it looks like there are no bent valves I would still check them. They sit perpendicular to the cylinder bore, not offset like most engines, so even if they've been tagged by the piston they don't bend to the degree they would in other engines. All it takes is a few thou to cause a leak. Clean the head around the valves, set the head so the ports are facing up & pour some liquid (water, alcohol, gasoline) in the ports & look for seepage at the valve seats. Now's the time to address it if they leak.