Hi there -

You have made a great choice in cars. These wagons, though lots of work sometimes, are really, really nice. Mine came with a cracked head gasket. Symptoms were very similar to yours; not over heating, bad fan clutch, hoses behaved normally. The dead give away was lots of oil in the coolant reservoir (you don't really have that symptom - totally).

I drove my Klause for 6-8 months with Zero troubles - until I had all the parts together to replace the head. eBay prices on a #22 head (not necessary that you get a #22, a #17 or higher is fine, I even have read that there is a #16, but I don't know much about those) - range from $900 on up. Though I haven't been looking for almost a year, so I don't know what they are trading for these days. They pop up once in a while here on the PP forum. They weigh 50-60 lbs and are expensive. Insist on seeing a pressure test and inspection receipt from a machine shop if you are getting one thru the mail. If inspecting one in person, the cracks are pretty easy to see - there are photos here on PP. They normally form between the IP nipple and the valves.

I made the mistake of buying the expensive Haznet rail pin extractor tool, which I immediatly broke. That job can be done with a stack of washers and a hardened bolt.

Here are the threads I started that kinda document my story form start to finish. It is not an end-all source, but will show you many of the troubles that can pop up. you don't have to replace all the stuff I did.

Shoot anyone here a note, many of us have done this very job. The car is well worth the effort.

http://www.peachparts.com/shopforum/diesel-discussion/339580-1987-300td-i-just-brought-home-car-ill-burried.html

http://www.peachparts.com/shopforum/diesel-discussion/342111-dang-broke-my-pin-extractor-tool-after-only-2-minutes-use-working-my-300td.html

http://www.peachparts.com/shopforum/diesel-discussion/342366-om603-head-removal-last-step-i-hope.html

http://www.peachparts.com/shopforum/diesel-discussion/342541-om603-way-engine-rotation.html

http://www.peachparts.com/shopforum/diesel-discussion/342736-om603-head-almost-off-except-one-bolt.html

http://www.peachparts.com/shopforum/diesel-discussion/346655-ready-thoroughly-flush-my-om603-post-head-replacement.html

http://www.peachparts.com/shopforum/diesel-discussion/350080-klause-running-i-dont-know-why-but-he-runs-drives.html

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1987 300TD named Klause
1987 300TD named Spouse
1987 300D named Seabiscuit
1980 300TD names Chloie (now sadly gone)