I removed the fuel tank sender this morning so I could play with it and see what happened when I let the float go all the way to empty. Answer: nothing!

Apparently the "low fuel" circuit does not work.
I didn't have time for photos -- the sender is not like the tubular float that the 124 and 124 cars have. The 210 apparatus has a small float like a carburetor has, but built on the lines of a toilet tank float -- a long stiff wire with a foam float. The mounting is a (plastic) cap that twists off of the fuel tank without a lot of trouble. There are two protrusions with round holes for the special tool that Mercedes probably sells but I just used a square-shanked screwdriver and carefully levered against the protrusions. About a 1/8 turn CCW and it comes loose. It has an o-ring seal that biodiesel does not seem to have affected. The apparatus was actually quite clean, considering it is almost certainly the original.
You are no doubt aware that older Mercedes fuel floats have three wires -- the third wire is for a hard contact that turns on the "low fuel" light. The W210 cars have only two wires. The potentiometer that the float operates is a VDO product, a small ceramic printed circuit that can range between zero (full) and 2000 Ohms (empty).
The fuel gauge must be driven by a circuit that senses the high resistance and turns on the light. Maybe there's actually a mechanical contact in the meter movement itself. Whatever, mine does not work. I have already checked the bulb -- it comes on dimly during self-check -- but maybe it's the wrong bulb. Maybe there's an electronic fault somewhere. I'll tear the cluster apart and see what I can find.
It may be that the time we put 16 gallons in the tank the low fuel light should have been on and we were close to running out. In the meantime, we have to be more observant since we have no light to remind us. I'll update this again when I figure out what is wrong.
Jeremy
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"Buster" in the '95
Our all-Diesel family
1996 E300D (W210) . .343,000 miles
Wife's car
2005 E320 CDI . . 148,000 miles
My car
Santa Rosa population 177,300 (2026 projected)
Total. . . . . . . . . . . . 668,300
"Oh lord won't you buy me a Mercedes Benz."
-- Janis Joplin, October 1, 1970