300TD Suspension
 

I've an '87 300TD, fine car, but has worn off the inside thread of both back tires. 6/32 on the outside, 6/32 all around on both front tires, bare metal threads on the inside of both back one. I watch load weight and never exceed, not even close. I was told this car has a 'hydraulic' suspension. How do I diagnose it???? Anything else that may be a contributor??

I too own an '87 TD. Your problem is common actually with all 124s and 126s. The suspenion rubber gets old and worn and the rear wheels do sort of a tilt. My 87 has the same thing, though I haven't worn out the tires. I am keeping up on the tire rotations. The rear suspension of the 124s is a multi-link design, with several rubber bushing pivot points. With time they wear. I have seen many 126s going down the road with the rear wheels tilting inwards at the top.
If there was a problem with your self leveling system, usually it's seen by the car's back end sagging.

In other words you need to replace the suspension rods that hold the rubber bushings. A DIY job if so inclined. Then get wheel alignment done for rear wheels.