Most likely the voltage regulator brushes are worn off -- I've replaced four or five of them over the years on European cars, always the same symptoms -- battery gradually goes flat, headlights are dim/flicker, no increase in brightness with rpm increase, and the alternator lamp glows dimly. Usually can't see that except at night.

Voltage regulator is about $30, two screws, dead easy to replace.....

If the alternator is noisy, replace it. Just did the one on my brother's 300D. He broke a two year old belt on the highway, limped home and was installing a new belt when I stopped over (he's had neck surgery and has some serious limitations on neck movement now) -- I spun the alternator and it squeaked with the belt off -- time for a new one!

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!