Clunking sound when turning wheels all the way to left or right. What is it?
 

I often hear a loud clunk when I turn the wheel all the way to either side in my 126. What could be causing this?

Probably knocking over the beer can you left there after cleaning and shining the wheels :D

I would check the ball joints at least. Take a look at the tie rod ends too. Anywhere the rubber covers are torn/missing could be causing your problem. Inspect the brake (track) rod mounts too.

The front end parts on a 126 and the 123 for that matter are a beautiful piece of German engineering. I just finished replacing ALL the moving parts on my car this week. Testing the front end components is also easy but may require a helper. Jack up the front end one side at a time and support with safety jacks. Then while helper looks on, start jerking the front tire from side to side and from top to bottom. Also reach for the tire from the front and jerk it from front to back. Any play will be painfully evident in the movement of either the lower ball joints, upper ball joints or especially the track rod bushing at the rear. Look carefully at all the rubber bushing covers to see if any are torn or broken. You can also use a large prybar to lift the tire up and down. If your helper does all the moving you can do all the watching with your trouble light. I will bet you have bad track rod bushings on one or both sides. Listen carefully when pulling in or out of a driveway at slow speeds, you will probably hear a clunk of some type. The good news is you can do the whole job yourself if you have a reasonable assortment of 1/2 drive sockets and a nice place to work. The bad news is a dealer was perfectly willing to charge me over $2500 for what I did in my garage in several days of hard labor.