You need to pull the valve cover and take a peek -- it's possible that you have no cam lobe on #2 anymore so that #2 intake doesn't open much. You can also listen better here that out the dipstick tube for leaks.

Does it burn significant oil?

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!