Either a bent or internally broken shock (spring suspension) or a dead accumulator (hydraulic suspension). I believe you have a plain spring suspension, but the hydraulic one was optional on some cars and shows up once in a while.

Probably just the shock.

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!