That model has a pricey servo that controls the heating/AC system. My guess is someone was too cheap to replace it and bypassed it, causing the problems. I think a rebuilt servo with a metal base, instead of the original plastic (which cracks) will run around $600. Performance Products recently came out with a digital replacement for the servo which also is about that price. The other option is finding a functional one in a scrap yard or buying used from someone on this site. The servo is a large plastic topped item with a lot of vacuum lines and wires coming to it mounted on the fender behind and to the right of the AC compressor. Heater hoses go in and out of the bottom of it.

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13