New member needs advice.

[vanastro]

Hi everyone. I am new to this forum and also a new owner of an '84 190D 2.2l 5-speed manual with 170k miles. I picked the car past weekend off CL in Phoenix, AZ. Upon calling the seller I was told that the car needs only a new alternator, new tires and new window glass.
At the first sight I've got a bad impression. The car sat low on the ground because all 4 tires were flat. The rear glass was smashed and all the pieces were inside. The front fog lights were smashed too and the wind shield had a crack. Still I didn't loose my excitement. I asked the owner to start the engine. To my surprise the engine started immediately despite a weak battery. It run a bit rough and noisy though, but didn't smoke at all.
That convinced me to buy the car. He wanted $1500 and wouldn't negotiate. So I paid what he asked. It cost me another $225 to tow it 120 miles (one way) to my place. I know, that was a good deal (his friend). So the total was $1725.00. What you think?
So today, I inspected the car and this is what I found.
1) the car was sitting in the elements for at least 6 months, possibly longer. The tires welded to the hot asphalt and thread got ripped off.
2) alternator pulley was completely loose and the serpentine belt came off.
3) coolant was low and I added one gallon of water. Then I discovered the leak. There is an electric circulation pump, for the heater I guess, that was leaking. The good part was that I did not find any traces of oil in the coolant reservoir or water in the engine oil.
Upon further inspection I found that the heater is bypassed. Water inlet and outlet are not connected. That means heater core is most likely leaking, right? What are the options. Can the old one be repaired, buy a new one any other alternatives?
4) engine front is covered with hard oil sludge and dirt. What is the likely source of the oil leak?
I would appreciate any advice from you experienced W201 owners. Thank you.