Thanks guys!
Well I checked ground connections, all seem nice and tight.
Put new end connectors on the mystery wire and nothing (noticeably) happened.

Decided that it couldn't hurt to check the brushes on the voltage regulator.
Took it out and they were less than an 1/8" exposed!
Put in a new voltage regulator and now not only does the tach work properly, the jumpy fuel gauge is now working properly, headlights are brighter, dash lights are brighter and starts up MUCH easier than before.

I don't want to be overly optimistic but before whenever I started it up, it would kinda clack a few seconds until the oil got to full pressure. Now it doesnt do that at all. Just purrs. Strange, and I'll watch that one, but seems the voltage regulator may have cured a ton of strange little symptoms.

I know that voltage regulators fix some goofy things...but it's been a few days now since replacing it and seems to have breathed new life into my 317k baby.

__________________
Current: '91 300TE 4MATIC 317k and climbing...
Former:
'81 300TD Wagon 168K "Tank"
'83 240D 216K 4spd manual "Da Bear" (aka best car ever)

"Never sweat the petty things...
and never pet the sweaty things."