You might try purging your engine with Lubro Moly. See the Diesel Giant website for a great description with photos and everything. One and one-half cans were enough to totally cure both my 85 300TD and my 90 300D 2.5 turbos from smoking except under the most severe load.

As you run the Lubro Moly through the engine, it gets darker and darker. You run the engine at different speeds until it will barely smoke at a fairly high speed. It will smoke A LOT at first (think a tire fire stirred up by the Tasmanian Devil) so do not do this on anyone's laundry day.

Once purged, the 300TD was twice as frisky. It improved performance on the 300D as well, but not quite as noticeably. I expect better fuel mileage, because smoke means that the fuel is not being turned to energy properly. Diesel Giant recommends a new prefilter as well as a new metal main filter, which I did.

Another thing to try is to clean the tank screen. It is a combination fuel screen, with a mesh like the plastic prefilter, and tank drain plug. There is a small unscreened part near the thread screws of the plug which allow some fuel to enter unscreened. There were a lot of small black particles in the fuel I drained, looking like black grains of sand.

On my 300 TD it is located in the center of the tank. When my 85 TD's tank was low the engine was starved for fuel and ran very poorly. You need a tub to put the fuel in- most of it can be recycled. (I poured it through a double thickness of old t-shirt). I thought I would need a new tank screen, and bought one, but it was easy to clean the original one ( base made of brass, not aluminum like the new one) to new condition. I soaked it a while in MEK and then washed it in dish detergent and water, with an old toothbrush, and it now looks completely new and undamaged. My guess is that a soaking in rubbing alcohol and detergent would have worked as well. I bought a new tank screen, but I did not really need it. Now I have the old one as a spare.

To remove it, you need something resembling a 22 mm Allen wrench. I bought a bolt 22 mm across the flats and turned it with a big vise grip. You might buy two nuts and a lock washer and then you could turn it with a 22mm wrench. This is assuming that your 240D and my 300TD have the same tank screen, which I deem highly probable.

I expected to find floating algae, and hideous globs of goo, but the screen was just crudded up with tar- the sort of crud that you see in the small plastic filter. You will want to run the car almost out of fuel before you unplug the tank.

If you want to drain the tank completely, remove the tank filler cap. Wear rubber gloves and do not position your face below the screen.

My car ran well until the fuel level got down below a quarter tank: then it ran sporadically fast and slow, as if starved for fuel.

This may or may not solve your problem, but it won't cost much and is worth a try.

DISCLAIMER: this worked for me. Diesel fuel is rather nasty. Be aware that I am not a trained mechanic, and suggest you take every precaution possible to avoid getting fuel on you and of course, combustion. Do all this at your own risk.

Someday, I will drain the tank on the 300D. I have not done so because I have no symptoms as the 300TD had, and I paid Heinz and Hans many bucks to drain the tank two years ago when Hans said my poor performance was due to water in the tank.

By the time I finally got it running well, I had replaced the Turbo, the computer, the Diesel Pump and several other expensive items. I have not darkened Heinz & Hans door for engine-related problems since.

Best of luck

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Semibodacious Transmogrifications a Specialty

1990 300D 2.5 Turbo sedan 171K (Rudolf)
1985 300D Turbo TD Wagon 219K (Remuda)

"Time flies like and arrow, yet fruit flies like a banana"
---Marx (Groucho)