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The '87 diesels are very reliable, but the best engines are the 5-cylinder OM617 engines because they have a cast-iron cylinder head.
The '86 - '87 diesels are prone to crack heads if they are overheated at any point.
The '90 - '95 350 engined S-Class cars' engines would fail because of poor design. Mercedes corrected this problem when they put new engines in cars with blown engines. Stronger connecting rods and pistons make for a really tough engine.
My 350SD has not given me a moments trouble and has lasted for 60K miles of hard driving since I owned it. However, it has had the engine replaced by factory(NOT REBUILT, BUT ENTIRELY NEW).
I would only buy a 350 if I absolutely knew the engine was replaced by Mercedes at some point in it's life. Otherwise, follow everyone's advice and run away from it.
*350SD/SDL Mercedes are very expensive, usually, to purchase. They only made a few thousand in the entire world. The 300SDL was only 33% the production number of the old W116 300SD(which is hard to come by). I think we know that these rare diesels will hold up very well in future pricing.
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1987 300SDL (324000)
1986 Porsche 951 (944 Turbo) (166000)
1978 Porsche 924 (99000)
1996 Nissan Pathfinder R50 (201000)
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