Well, after another couple hundred miles I'm still happy with the change. I've tried holding it in 3rd til 60 mph and it makes a difference but it really sounds wound tight at that speed. 50-55 sounds less tortured and works out ok for acceleration purposes. I did a 0-60 time and it has dropped from 28 sec to about 24. That's leaving it in 3rd til 60 which seems to result in better acceleration.
To any of you who are thinking about making a final drive ratio change on one of these, I say do it. If you have a lot of highway driving with low to moderate hills you won't be disappointed and if you have a lot of in-town driving the first 3 gears are more useful also. The cabin noise level is soooo much better and the driveability (except for uphill between 50 and 60) is greatly improved. I still need to make the best of the state-of-tune of the engine but even without a fresh valve adjust and timing check the overall effect is positive.

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1983 M-B 240D-Gone too.
1976 M-B 300D-Departed.

"Good" is the worst enemy of "Great".