Gary,
1. Vacuum pump "inlet" is from the brake vacuum reservoir, the pump "outlet" goes to the engine air intake. The outlet hose is the one that shouldn't have oil in it.
2. If it ran fine then suddenly didn't, then it probably is a bad batch of fuel (i.e. water). Your secondary fuel filter (the big one) has a drain at the bottom corner. Get a small can under there then open the plug and drain the filter. Put the fuel into a glass jar and let it sit overnight. If bad fuel then drain tank from big bottom plug (have o-ring on hand), pull and clean the fuel line strainer (in the tank), slosh some gasoline through tank, then button it up and prime with hand pump until your arm hurts, then prime again. A fuel separator is a nice add-on for a diesel.
3. The gurgling from the tank when using the hand pump probably means the hand pump is leaking air in. Change it or fix it. I lube mine from the top with engine oil to keep the "leather" wet. Bubble in primary (small) filter is OK, it gets taken out in the secondary filter.
4. Might want to double check the glow plugs. Pretty easy to crack an insulator. Do all the "hangers" get hot is the first question, then check and clean the ground wire connection.
5. The service manual on CD (buying parts from here keeps this "free" site going) pays for itself if you're going to keep the car.
6. psFred always gives good advice.
7. The vacuum line from air intake "throttle body" is a separate circuit. Vacuum pulled from the throttle body operates the governor which is located on the rear of the injection pump.

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daBenz - 1970 220D