I have about half of an inch of play in the wire and cannot adjust it enough to be tight against the linkage... I am still experiencing high rpm shifts.. but sloppy low shifts if i adjust it closer the the linkage. I know that is how its suppose to work with minor adjustments...

Is there a correct distance it should be sitting away from the linkage or is it just by how the transmission is shifting... any thoughts on correct approximate setup?

By 'sloppy shifts' I assume you mean flaring. If so, that's caused by too little vacuum, not by the bowden cable. Have you checked your kickdown switch? A stuck kickdown switch will cause high rpm shifts. Unplug it and see what happens. There's supposed to be play in the bowden cable I think.

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

Flaring is too much vacuum. Hard shifts are too little. Kerry should know better

Your trans should shift smoothly and it's usually better to have it a bit on the firm side. If you're getting flaring shifts(rpm revving up between gears) then you either have the vac set too higher, or the internals of the trans need some attention. Could just need a fresh filter and fluid. Or it may need the K1 or K2 springs replaced.
If you're getting hard clunky shifts then you have a vac leak you need to chase down.

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Ooops, yep you're right. That answer sucked too much.

__________________
1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

yes i get hard shifts into third, im sure there is a vaccum leak in my doors for the locks cause they work when they want to. The shifting is still around 2700 to 300 rpms to shift. which could be why i am hard shifting... there is around 3/4'' of gap between the adjustable cable and the throttle linkage.