RunningTooHot:

Sorry to hear that you had to find out the hard and expensive way that your head was cracked. I and, I would guess, others would be interested in the reason(s) why the head cracked. Did you inspect the old head gasket to see if it shows signs of allowing coolant to pass into the cylinders? Or, are there clear round circular impressions left by the head gasket on the head (these would be from the metal reinforcing ring and gasket adhesive) or are the circular impressions partially missing in places (like between cylinders and where the water jackets are located between the cylinders)? Reading the old gasket and the components that were sealed by the gasket is a vital key to determining why a failure occurred. If the head gasket was leaking coolant into the cylinders, then that may be why the head cracked since water does not compress and given the very tight piston to head clearance (to get the 21.5 to 1 compression ratio) the water could have caused the damage to your head.

Or, did the head have a flaw from the factory that eventually worsened to cause the damage you experienced?

Or, was the engine really over-heated sometime causing the initial leak leading to the failure (your minor running hot symptom does not sound like it is enough to cause a head gasket leak/failure)?

Or, was there too much boost from the turbo?

Or, was there something else that caused the failure (like failure of the head bolts)?

You may know that pre 1979 300D's had a head gasket problem that was fixed by M-B in 1979 by using a new head gasket design, using torque-to-yield head bolts, and harder head bolt washers.

Finding and understanding why your failure occurred is key to avoiding the same problem in the future.

Good Luck!
Tom

__________________
America: Land of the Free!

1977 300D: 300,000+ miles

American Honda: Factory Trained Technician & Honor Grad.
Formerly:
Shop Foreman;
Technical Advisor to Am. Honda;
Supervisor of Maintenance largest tree care co. in US for offices in Tex.