It really hard to determine a specific value on these cars. Solid mechanicals with a recorded history and presentable cosmetics immediately make a w123 a desireable purchase. Wagons make it even more so simply because they are versatile, rarer, and consequently harder to find and more sought after.
Like you said, values are all over the place. If the car is mechanically sound and 100% functioning and the condition of the interior and exterior is fair-good I'd say $5000-$6000 is a good place to start. Some may think it is low, others may think thats high, but realistically you have to price high so if you bargain with a buyer you still end up with a good deal. There arent many of these cars out there anymore, an educated W123 buyer will know that and will be willing to pay more for a solid sound runner that has been maintained, and will probably be willing to live with or resolve cosmetic issues after the purchase.
I'd also contact Mr. Diesel- he is local (Mountain View), and has vast knowlegde on how to market these cars for optimum profit, regardless of condition. He also buys solid cars with records, restores them cosmetically and sells so he may very well be interested in your car.
http://home.comcast.net/~mr.diesel.info/MrdieselTreepadSite/documents/3333CDC978239CB71F0DE1B7370B10DD04FA9F61.html
If you can, posting pictures of your w123 will enable myself and others here to assess the car more accurately, given your word on its mechanical state.