Now wait just a minute. Did things change that quick???!!
A week ago at the Diesel drive you were extolling the virtues of the wagon (I agree btw!) and how you'd like to keep it forever. Now this?
Certainly the easy utility of a W210 wagon and an ML would work, and could be had within your budget if you shopped well, but you'd need to be lucky too.
The W124 is the last of the E class that had unarguable Mercede3s Benz build quality and durability.
Your family's newer cars have all been really good ones, but frankly, those later cars have had serious build quality issues, especially ones from 2000-2006. You'd neeed to be lucky once again if you went for one.
The ML, which are NOT built in Germany, have had a VERY high percentage of really bad ones sold, especially in 1998-2000 models, also.
Likewise, the W210 wagons have had issues with such things as the spring perches, rust, and quality control, and electronic and sensor problems the W124 NEVER had.
If you are willing to take the bold step forward and let the W124 go, well, OK, but do so with an clear mind about the pitfalls you could face.
If you have hesitancy, talk to your father about it, and see if he can shift things around, let the sister (for instance) inherit the ML, and source a good replacement your mother could like, or start your sis out with an agreeable used Mercedes, like a really nice W124 E300 sedan in a color that she liked, which was in good condition.
You should keep your wagon. It is in beautiful condition, you know every quirk and fault it has like the back of your hand, and you have put some VERY excellent modifications to it that only a true W124 person could appreciate, and you have many more in mind (see signature..)
Plus the W124 is FAR more mechanic friendly and DIY friendly than any ML or W210 could dream of being.
I trust that I am not meddling too much here - but I feel I know a little about you, and the car yiou have - and I think a better tack would be to maybe, if you like the wagon and would like to keep it, rather persuade your parents to steer your sister into something appropriate for her, and not your wagon.
And perhaps, if it is fair and reasonable, get a little help from them at the same time, to upgrade the wagon towards the euro accessories and performance that would bolt on easily, and make it faster and closer to the dream car it could be.
That would be your kind of a consolation prize, for your being "forced" to keep that old car.
I wouldn't let it go without a fight. It is a really beautiful wagon. I know that, I have recently been in it, and I know how good it is. You should keep it.
You might want to keep in mind that it is not altogether out of the question that any new or indifferent female driver would run it into the ground or wreck it, within a year. How would you feel watching that take place?
Educate your sister in the joys of a W124 or a W201 sedan. See if your father is agreeable to bankrolling the purchase of one. I'd bet a long weekend of careful looking in the Los Angeles area would net you one in beautiful condition, and in a color that she likes.
Girls are funny about that - Proper interior and exterior colors ARE VERY IMPORTANT to them. I know that. (But don't know WHY it is)
There seems to be a LOT of subtext here. No reason not to make everything work out in your best interest, in this situation. Don't change the wagon without a REALLY compelling reason. From what you have mentioned, I don't see one here.
Unless I am missing something REALLY big.