Problem solved. Ended up getting a piece of 16ga steel from Home depot and cutting my own discs with a hole saw on a drill press. Pilot bit removed.
Had them Tig welded by a friend today. Weld looks well done, professional looking.
I'll paint over the affected area and that's as good as it gets. Can't imagine having any rust issues. Tank was in excellent condition to begin with.
Should increase the cars range to 650-700 highway depending on load.

Assuming ~30mpg and you use every drop of fuel in the tank, sure you can get 700. Let's be realistic, you're gonna be refilling ~20 gallons, not the full 23 gallons that the tank holds. Realistically more like 560-600 miles highway doing 28-30mpg and 100% highway.

__________________
Current stable:
1995 E320 157K (Nancy)
1983 500SL 125K (SLoL)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)

Gone and wanting to forget:
1985 524TD 167K (TotalDumpster™) [Definitely NOT a Benz]

With the 90L tank I've done over 900 miles on a fill up. The low fuel warning comes on at 2.5 gallons and that gives me another 100 miles on the highway. In my 87 300D/5spd/90L LA to SF to LA at 75mph is easy. Also from my experience the real usable capacity of the tank is closer to 95L.

__________________
CENSORED due to not family friendly words

I was wondering how the low fuel light would work with this tank. Looks like the same sending unit is used in both tanks. Car gets 31mpg with no load @ 75mph. 28 with moderate load, 26 when sagging in the rear (4 persons with luggage) 95L would be sweet! I assumed the tank volume was exactly as listed.

The 90L diesel tank is internally identical to the 90L tank fitted to the 500E. Since the fuel consumption on the 500E is much higher they fitted a shorter fuel sender so the low fuel warning would turn on earlier. I fitted my 70L sender in the 90L tank because it was in better condition but it is indeed identical.

Diesel tends to foam a lot while filling so when the pump clicks off, wait 10 sec and restart the pump. You'll get another gallon in at least. Also the tank is designed with about 20% air space at the top for gasoline fumes which diesel fuel doesn't have. The interior volume is closer to 110L with about 95L usable.
70L to 90L W124 fuel tank swap pics

__________________
CENSORED due to not family friendly words

Would you mind sharing how you're doing 40mpg at 75mph in an '87 300D? I'm sure a lot of us would be genuinely interested in knowing.

__________________
Current stable:
1995 E320 157K (Nancy)
1983 500SL 125K (SLoL)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)

Gone and wanting to forget:
1985 524TD 167K (TotalDumpster™) [Definitely NOT a Benz]

5 speed manual transmission with 0.8 overdrive 5th gear, lowered front suspension, full underbody aero cover, increased injection timing, no viscous clutch fan, electronic boost controller, electric fuel pump, modified ALDA, EGR delete, monark nozzles, R230 alternator with OAP.
5spd (Mercedes-Benz 300D) | Fuelly

And minor correction, it's closer to 38mpg @75mph, 42mpg @60mph

__________________
CENSORED due to not family friendly words