Larry -

Condensation on the windshield means the defroster vent is not closing completely. The defroster flap uses a two stage vacuum element. Both sections must be closed to fully shut off airflow to the windshield. On older cars the small (upper) diaphram generally fails first. This is why you see older MBs (and occasionally BMWs) driving around with condensation on the windshield. On older cars like your '88 the foam around the defrost doors which seals the closed door is long gone. So you may get a bit of leakage (and condensation) even if it is working correctly. I can't remember if my wagon had the condensation problem after repairing the CC system or not - definately did before. The defrost element is readily visible with the glovebox removed, so it's easy enough to check whether it is closing partially or fully.

On my '87 124 the large, bottom diaphram would close immediately upon starting the car. This mostly shuts off the airflow. After about 30 seconds the small diaphram would close as well. I'm thinking it was designed to clear any condensation that occurred while the car was shut off.

I'm starting to think your car has a general lack of vacuum to the climate system. Perhaps it's time to check the main vacuum source to the switching valve - I believe this is the solid green line. Perhaps plugging it and then checking from under the hood with a mityvac. Also, disconnect it at the switching valve and check the vacuum reading with the engine running. The problem may actually be under the hood...

- JimY