Mike,

You've gotten some very good responses, but I can't stay away from a thread like this. The manual transmissioned 240D's are near and dear to me.

With the engine idling and oil cap off, there will always be a little oil come out. It's hard to describe what is excessive, but it sounds as if yours may be. That alone is not the total indication. Oil consumption plays into this. Once you get a fix on oil consumption you will have a better picture of this. BTW, the engine has probably never been apart. 240,000 is not particularly high mileage on one of these cars that has been properly driven and maintained.

You will certainly want to follow psfred's instructions on the cruise control, but once you've checked all that you may find that there is a problem with the amplifier or some other expensive component.

Changing to R134a certainly CAN work okay, depending upon your climate and how you drive. If you do short hops in a Houston, Texas type climate, it's not gonna cut it. You just lose too much capacity. If you're in a milder climate and don't do short hops, stop light to stop light it can work well for you. You will not have to replace the evaporator. It is best done by removing all connections and flushing thoroughly with refrigeration system flush and compressed air, being careful to remove ALL the flush. As you put everything back together, replace the filter drier and use green o-rings everywhere. Remove the compressor and dump out all the oil you can get out, which may be none. Then put in about 6.5 oz. of Ester Refrigeration system oil. Once the system is back together, pump down with a wet vane pump for 24 hours if possible. You want to get absolutely as much moisture out of the system as possible. Any moisture left behind combines with the refrigerant making an acid that will eat up the system from the inside out.

Your best bet would be to get a stick of the injector bypass hose, cut individual pieces off of it and replace all the lines. Also replace the plug on the back injector.

If the brakes squeak, but still have enough lining that they won't go to metal to metal contact any time soon, my suggestion is to turn up the radio. The squeal hurts nothing.

One of the other posters offered some good advice. The oil leak you suspect to be the main seal very well could be the oil filter housing, cooling lines or another source. Wash the engine thoroughly, then start looking over, under around dilligently until you find EXACTLY where the leak is. I went through a rear main seal wearing out, it was at 380,000 miles and it went from zero leak to GUSHING all of a sudden. I'm not saying they all would fail in that way, but that was my experience. As psfred said, I pulled the motor and did an overhaul at that point. It just didn't make sense to repair the seal and leave everything else alone. Check it all out before you condemn the rear main seal.

I expect it to take 6.5 quarts of oil when changing the filter. I would recommend a universal grade oil. These are specifically designed for diesel engines, and what the truckers use. Examples are Chevron Delo(that's what took my original 240D engine to 380,000 miles), Mobil Delvac, Shell Rotella T. In our area they have the Shell and Chevron at WalMart. You can always get it at the truck stops or truck service shops.

psfred said 90W in the transmission, and maybe that's what yours calls for. My manual showed motor oil. I put in 10W30 Mobil One several hundred thousand miles ago and my transmission has still never been apart.

I have used power steering in quart containers from Auto Zone for years with great results. Don't use ATF even if the manual says so. It has changed drastically since that car was built and is not good for the seals. Power steering fluid is more expensive than ATF, but these power steering components are EXPENSIVE, don't take any chances.

You certainly will want to adjust the valves because you don't know when it was done last. I personally have found 15k mile intervalse to be excessive, but I will never argue with too much maintenance. psfred already gave you the story on the valve cover gaskets, they basically last virtually forever as long as they don't harden.

Everything else has been answered quite well. As far as I'm concerned the manual transmissioned, 123 series 240D is an absolute masterpiece of engineering for it's time. Not fast, not great handling, but solid and longlived.

Enjoy,