The tensioner was a very clever design that didn't quite work as planned. It uses the same rubber material as the rear suspension links as the "spring", providing great vibration damping and quiet operation.

Unfortunately, as you have discovered, the rubber dies with age and use, with the result that it will no longer generate tension on the belt no matter what you do with the tensioning screw.

Bite the bullet and replace it. $175 is right in line (see FastLane). Only necessary every 15 years or 200,000 miles.....

Chances are the rear links are goofy too.

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!