I bought this same deal. 1200 for the wagon with a questionable tranny. I've put 15k on it since I bought it and flushed the tranny fluid. I love it. I also bought a recently rebuilt e320 tranny thats ready to go in when this one goes.

I bet you can get many happy miles out of it.

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77' 300D, "Cartman" SOLD @ 150K (didn't know what I had)
83' 300SD, "The Superdon" 325k+ @ 28mpg
95 E320 wagon, "Millennium Falcon" 231k+ @ 24 Mpg
95 E300D, "Sherley" 308k @ 33.69 Mpg, currently anticipating a head
99 Suzuki Intruder "Trudy" @ 45 mpg