When the problem started? Especially if just after you did something would be important to post.

I dislike wild guesses and this is one. It almost sounds like your centrifical mechanical injection pump advance system is sticking in an advanced position. Not all the time though. I also wonder if the blue smoke is related or could be. My first thought is I think not.

Never heard of one of these cars doing it though. It would take some form of electrical firing timing device to prove it. I am not suggesting you pursue this particularily at this time.

Just to keep it in mind. What disturbed me was the idle getting better with glow plugs turned on although you have good compression. Plus loosening one injector line at a time makes no differance basically so it is not related to one cylinder.

This eliminates you messing anything up with the injection pump when retiming the injection pump as well. To me symptomatically it almost sounds like the injection pump is way advanced when it should not be. I just feel that the clues are there but I cannot grasp them properly yet if ever.

Once again the idle quieting down with glow plugs applied may not quite fit in with my thoughts at the same time. That is a very important clue to a guy like myself.

It for example would not delay ignition in my mind but that sounds like what may be happening. The excess smoke is kind of another wild card that may not fit well. Also is your egr valve staying closed when it should be?

I will be watching your thread as your problem is very interesting. This also will help make me think about the problem in a little more depth.

Well at least having a Mercedes mechanic with forty years diesel experience available is a real upside if it comes to it. I would not like to drop a problem like this on some of todays mechanics. Also if he is friendly have you talked to him at all about what he thinks? My guess is he may have seen this issue before.

One test I might do to verify the balancer mark is accurate. Remove the number one injector. This with the engine some degrees before top dead centre. Rotate the engine slowly. The oil should be visable coming up to level. When it stops rising this verifies the piston is at tdc. A straw can make this a very accurate level check. I left out that you have to add oil to the cylinder.