i dont know the engine in the 1995 e300... If its the 603/606 it may be the infamous head cracking issue. but i would make sure that there is no chocolate milk in the radiator (oil residue) And your not mixxing water in your oil. What color is the smoke? Do you see any bubbles in your fuel pick-up line? The valves in the inline six are hydraulic self adjusting.

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Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?

As long as they would add one additional commandment for you to keep thy religion to thyself.
George Carlin (Wonder where he is now..)

1981 240d (engine donor 1983 240d) recently rebuilt engine hurray! - No more.. fought a tree and the tree won.

pearl black 1983 240d 4speed (Converted!@$$%) atleast the tranny was rebuilt.