yeah, if the bodywork is too expensive maybe just get it mechanically sorted out first (new radiator, etc), then worry about the new body parts later. I bet the oil you saw was transmission fluid leaking from the broken radiator (the radiator has a built-in tranny fluid cooler)... the engine's probably fine.
If you don't mind mismatched colors, the junkyard would be a great way to deal with the bodywork once the car's driveable again. Then maybe have the whole car repainted somewhere down the road.

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1987 190d turbo, 5-spd conversion -- 146k
1973 280 -- back on the road with a euro m110
1980 300SD -- RIP - Sold for parts (lost battle with rust)