My 87 300SDL has that dreaded water inside the headlight. The bulb is still working for now.
Who knows of a sure fire fix for this issue other then going for broke for another new headlight assembly itself.
I apologize if this is not the right forum to ask this or if the answer is already here somewhere as I could not find it, thanks.

A seal is bad and allowing moist air into the headlight to condense. You might also have a hole or crack doing the same. You can look for the leak and reseal with some silicone. Make sure you dry out the headlight very well.

__________________
'84 190D 2.2 5MT (Red/Palomino) Current car. Love it!
'85 190D 2.2 Auto *Cali* (Blue/Blue) *sold*
http://badges.fuelly.com/images/sig-us/302601.png
http://i959.photobucket.com/albums/a...0/sideview.png

Will do!