the oil pump will not make the noises in the video. this sounds like a rod bearing to me.Need to pull the pan to check rads.

Lifting the valve cover will be good for checking the cam, and followers. Look for any lobes that are noticably smaller then the others, or have bad grooves in it. Not likely the noise, but worth looking at for a general idea of engine condition. If it looks bad up there, and with the rod knock it looks like rebuild time for sure. If all is good on the top end you may get away with just putting bearings in if the crank is not scoured. This is assuming you are looking for a quik/cheap fix for now so you can get a feel for the car and decide what to do long term. Long term I think this car may be a good restoration canidate, then a proper rebuild will be in order.

I see no reason not to work on it, and learn if you are inclined to. It is a straight forward and simple car. Take your time ask plenty of questions, photogragh everything before taking apart, and as you take apart. Also get the Mercedes engine manuel, not haynes, chilton etc but real mercedes .

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1977 240D turbo