SDs can be had for excellent prices if you shop around, espically ones that need some general (and simple) PM done. Heck even some mechanical issues are easy such as bad turbos, bad transmissions, etc.
The 617 motor in the SD is pretty easy to work on also, it's a good place to learn around a diesel motor and how they operate. Also get a feel for the S-class bits, they're different than the regular 300D (I owned one of those too
). Despite it being slower, I prefer either the SWB or LWB S-class. Just the entire car is that much better.
I recently scored my SDL, and it's a different vehicle with the 603 motor. It's the second generation of the W126 frame with newer features too... Air Bag standard (instead of option in '85), better factory stereo (still not great but way, way better than my '85's was), etc. The LWB is nice when family is here so we can pile in and be comfortable... the SWB I usually drive about with only a single passanger.
Power is different between the two motors also. The 617 seems a bit stronger off a deadstop and runs better at lower RPM from what I've felt, the 603 really likes to rev up... it's going to town at 75mph and pulls to 95mph easily! They're different animals.
The 603 does have some issues with the early head design cracking, it's only if it's severly overheated does it crack... but as someone else stated on here: any vehicle severly overheated will run into big problems. Mind the operating temp and you'll be fine. I really haven't driven mine too much yet due to the clutch fan not working... seeing how it's in the upper 90s here, it's prudent to wait it out.
A 350SDL would be slick with a 603 motor and the updated head, I recall it having the SLS like the 560s do as someone told me along with dual airbags, 10 speaker stereo, adjustable rear seats like my SDL has, heated rear seats, etc. It'd be a killer cruiser.