If I were you id sell the 87 w124, and put that money into cosmetic restoration of the w123 wagon. Sounds like there is alot of sentimental attachment related to the car... preserving that is priceless. The W123 is already a classic, its only going to appreciate in value seeing as how you take care of it. Wouldnt it be great to be able to pass it down to your children?
I sure wish my parents had held onto some of the cars they had when I was younger!