I'd pass unless you love to work every weekend for two years.
This car is too far gone.
But if you insist ....
1. How much blow by comming form the oil cap (removed) at 1/4 throttle?
2. 0-60 MPH time? This will give us a bench mark to judge what needs fixing first.
3. Divorce the wife now or perferably put her through vo-tech car repair and give her the MB.
4. Please ignore if I mis-read or just brain dead but is this car from west coats Wash.? If so was it in the St Helens fallout?

There are far better MBs on the market in your $ range.
Waiting for the one speical gal is what you should be thinking in your MB love/hate relationship. If I knew now ... I'd gladly pay $1500 more for a nice MB and a honest PO. There are good MBs out there in the $3k range that are cherry.

I agree that you should be able to find a decent driver in the $3000 range, it won't be perfect, but it should be better than the car you are describing. If you want "perfect," plan on spending significantly more. I also wouldn't pay anything extra for "low mileage" on a car with a broken odometer.

It isn't worth buying a car in need of this much repair unless it is VERY cheap. Even a car in good shape is likely to cost several $1000 before you get it the way you want it, it sounds like the needed repairs on this car could exceed the purchase price. If the car was this neglected, it's likely to have other problems that are not obvious. I would walk away and keep looking.

These cars demand a premium in the northwest...

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1985 MBZ 300DT
1969 MBZ 220d
1984 MBZ 300TDT
1981 VW Vanagon

There are deals to be had in the area though. Don't settle on a car like I did, shop around for a few months.

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1979 240D- 316K miles - VGT Turbo, Intercooler, Stick Shift, Many Other Mods - Daily Driver

1982 300SD - 232K miles - Wife's Daily Driver

1986 560SL - Wife's red speed machine

Yea, but for 4k I got a PERFECT RUST FREE W116 with functional climate control and beautiful paint. Good interior, one tear in the front passanger seat.