Read this post. Just went through something that seems similar.

http://www.peachparts.com/shopforum/diesel-discussion/323075-help-local-mb-mechanics-cant-figure-out-my-car.html


I would advocate to do the wastegate swap suggested by sixto. Read the link he provided a few times to understand it thoroughly. At some point if you are like me it will all click in your head and become trivial. It will cost right around $100 and not hard to do once you get in your head what you are effectively doing. You'll need to order 1 part, and the rest is just lowes/home depot/autozone type of fittings and tubing.

Might start with installing a boost gauge, probably another $50 and a few hours to do (mostly the hard part is finding a place to mount the gauges). That will tell you what's going on once you do get things working although you'll feel it for sure anyway. May as well drop in a vac gauge at the same time (OK another $50) and mount them both in the ashtray space. Great place to locate the two gauges in the w124 and it will look very clean if you are careful and you can illuminate the gauges to work with the headlamp switch using the ashtray lighting wires. Here is a youtube I put up with at least some highlights of that.

W124 Mercedes boost and vacuum VDO gauge installation - YouTube (sorry for the poor quality but it may help with some ideas)