Sounds like you're getting good advice. I'd have to think $400 is very fair if the rest of the car is as good as the body (minus the engine of course). Surely you can find a decent engine for another few hundred and make the swap.

Good luck!

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-- 1983 300D, acquired 10/19/2005 at 215,000+ turbodiesel miles ... engine croaked almost immediately ... back on the road at 217,210 with a 144K turbo motor from a donor '85. ... May 2007, replaced radiator. ... Now (2/28/08) about 240K miles and dead due to battery?