If the rear goes up when you pull on the lever, this means that the shocks (which are expensive), the hydraulic pump and the lines have pressure and can hold pressure. The springiness in the system is taken up in the chambers of the accumulators, which are half filled with air (which compresses) and hydraulic fluid (which doesn't). Chances are that the diaphragm between the two chambers has broken, or the nitrogen has leaked out.

Before I replaced mine, the suspension was rough and clunky in the rear. Now that I have changed them, it is smooth and even.

So you are lucky and don't need to replace the most expensive parts. You should consider replacing the fluid and filter, which aren't too expensive and are avaialble from Finish Line.

The Haynes DIY manual doesn't say a thing about the Wagon rear suspension, but it useful for other stuff. There is enough stuff on this Forum to inform you how to do the job and then some, in my opinion.Be safe, use jackstands, and good luck.

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Semibodacious Transmogrifications a Specialty

1990 300D 2.5 Turbo sedan 171K (Rudolf)
1985 300D Turbo TD Wagon 219K (Remuda)

"Time flies like and arrow, yet fruit flies like a banana"
---Marx (Groucho)