I would expect the factory alternator to be able to maintain battery charging under a normal operating condition such as running the A/C. I don't buy the argument that the battery discharging at idle is normal.

As for the voltage regulator - it's entire job is to maintain a set voltage. When the alternator heats up and RPM goes down, the voltage will drop as the regulator goes to full excitation voltage but the RPM is too low to support the load. That's why the setpoint is supposed to be >14V.

After the opinions posted here and doing some more late-night reading, I'm starting to lean towards cleaning up the existing alternator and replacing the regulator/brushes and seeing where it gets me. Obviously if I open it up and the slip rings are grooved all to hell it's game-over!

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Current stable:
1995 E320 157K (Nancy)
1983 500SL 125K (SLoL)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)

Gone and wanting to forget:
1985 524TD 167K (TotalDumpster™) [Definitely NOT a Benz]