I had similar problems with my 84 300CD. The problem was a burnt through grounding trace on the instrument mounting PC board. It was a little hard to find because the burned area was under the fuel gauge guts. I was able to repair it by installing a jumper wire around the bad spot.

__________________
____________________
1984 300CD (sold)
1973 220DPK 4 spd (died)
1978 350SL 4 spd gray market
2003 SLK32 AMG
1988 300CE (sold)
1997 E420 (Totaled)
1998 E320 Wagon