Strongly suggest following vstech's input on the inspection. If its an MB failure the repair will be free.

BEFORE they pull the head, do a full compression check. 240 on #1 is low, what are the rest doing ??

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1985 300D 198K sold
1982 300D 202K
1989 300E 125K
1992 940T

"If you dont have time to do it safely, you dont have time to do it"

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

They were indicating the compression check on the rest was skipped due to each of them responding when the injector lines were cracked.

You heard an unusual knock since this occurred? If not the description fits the typical head gasket failure on these engines.

I also thought the cylinder may have been lighting off early because of all the oil fed in. That perhaps causing the knock?

Hydro locking damage with the front head gasket failure has not been mentioned on site as far as I know with your engine. Still it could happen.