78 240D: To fix or not to fix, this is the question.
 

I bought this car about a year and a half ago and at that time the only thing it needed was a new vacumn pump. It had some rust which I was aware of, only two of the electric windows worked and the a/c compressor was working but needed some tlc. I had the oil and all the filters(fuel and air too) changed on a regular basis. About a week ago my brakes quit working and the car was not shutting off properly(vacumn pump probably) so I decided to inspect what might be the problem. The engine was fairly covered with oil and the air filter, which I had replaced about a month ago was particially soaked with motor oil . When I was inspecting the brake pads to see if they needed replacing I found what I think is a severe rust problem. Its located at the back of the right front wheel well. Starts wear the battery sits( which I can see the battery from the wheel well now) and goes all the way down to the rocker panel. Upon futher inspection I found a Bad rust spot on the floor board underneath the passenger seat which is now a hole a foot in diameter. Bottom of doors are rusted out and all the wheel wells have rust holes around the rocker panels . That undercoating is very deceiving.
The A/C compressor is froze up and none of the windows work now. These repairs alone exceed over $2000.00.
The engine is hard to start but does run and the trans still works.

I am now faced with the decision of fixing it or selling it for parts. Your opinions please?

As your location says Southeast, I would presume you are close to areas where rust isn't a problem. We just sold an imaculate 83 240D which had been thoroughly gone through (it had a chain failure and we bought it from another shop mostly for parts). The car was so nice we repaired the motor and serviced it through out. Original white paint and cold A/C the car sat for longer than we have ever held a car before being sold for 3500.

The point of this is that good bodied cars are widely available throughout the South, both running and fixer uppers. Your car is totalled by these economics.