Finally got my car back together and it drives & handles fantastic.
I did a lot of things so who knows what made the biggest difference.
The biggest change was putting in the alloy trailing arms from a
1984 500SEL. If you do this you use the anti-squat bar that is part
of the different geometry of the 500 & 560 W126 cars, I think up to '87.
The arms were a direct swap. Some details on the anti-squat bar
are shown here W126 aluminum trailing arm swap

This all started with a leaky CV boot.
Once I started to tear things apart I decided to do a full rebuild.
I had a 2.88 diff sitting in the corner of the garage for two years
just waiting to be put in.

Here's the list:
both flex discs
new u-joint, center support & centering bushings in the DL
subframe & trailing arm bushings
rebooted all CV boots with Astoria gun
3 nub spring shims
2.88 diff with new side seals
I also tore apart & rebuilt the calipers
on the aluminum trailing arms.

One reason I put in the anti-squat system is because I run WVO in
my car with an extra tank in the trunk. With that extra weight and
if I went to pick up oil in the car it would bottom out easily.

This new setup feels solid as a rock--less boaty.

Thanks go the Stretch, Vstech & Frank Reiner for their input on this project.
Oh yea, and Ceristimo for his flex disc trick with the
DS centering bushingspressing in driveshaft centering sleeve

Jeff

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1984 300SD 300,000 miles--two tank WVO setup
2.88 diff & 500SEL anti-squat rear end