I can't speak to the rust issue but otherwise our '96 E300D (non-turbo) is, at 302,000 miles, a fairly boring car--rarely does anything break.

In general, later cars are more electronic, break less often but harder/more expensive to repair if they do break. Later cars also have more safety systems (airbags, etc.).

The CDI owners on this forum seem quite pleased with their purchases. More money but still affordable.

Jeremy