The way to look at it is, add the cost of repairs to the value of the car. Take this amount and see what you could buy to replace it. Deside which car you would rather have. People buy new (or newer) car because they want them, but try to justify them with needed repairs to their old car. I am completly "upside down" on my 84 500 SEL and have no regrets. It is a wonderful car that I enjoy every mile I drive it. My 91 300D is not "upside down" yet, but I am sure it will be some day.
Just think of the repairs I could do on either of these cars with the $50K or $60K it would cost me to buy a new (or newer) car in the same class.
The only down side to the above is if the car is totaled in an accident, the insurance companies wouldn't give me squat for either one, but that is a chance I will take.

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84 500 SEL (307,xxx miles)