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You have some interesting problems there.
My first bit of advice is to find a independent shop and have them check out the problems. Dealerships are often way more expensive than an indy and are not always 100% correct on a problem.
So basically,
1- valve job
2- transmission shifting
3- power steering leak
Here's my 2 cents:
1-I'm not exactly up to snuff on what causes one to need a valve job? Excessive oil burning maybe? My 420SEL has 215k on it and to my knowledge it has not had a valve job, although it probably could use one but i dont think its the end of the world..
2-This is certainly an odd problem. Does it shift normally when cold? Only when it gets all warm it stopped normal operations?
3-I've never had a power steering pump leak on any of my 126s. That's not saying that its not possible but I've not encountered it yet and they're all of varying mileage/age. I would check it out myself and make sure its not something simple like a return line... If the pump itself is leaking, they're pretty easy to replace $200. The seal kit for it is like <$5 itself..
Hope this helps!
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82 300SD 145k
89 420SEL 210k
89 560SEL 118k
90 300SE 262k RIP 5/25/2010
90 560SEL 154k
91 300D 2.5 Turbo. 241k
93 190E 3.0 235k
93 300E 195k
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