Advice re aging 1988 300E

I am looking for some opinions regarding my 1988 300E. With 260,000 miles on it, my mechanic (a good, but "all makes/models" guy) says the engine is leaking or burning oil, it has hydrocarbons in the coolant
(overheating is only prevented by the aux fan kicking in or driving over 40 mph) and also it has a bad vibration problem when stopped (I am assuming motor mounts.) Oil consumption is now I think over a quart a week.
Trans replaced last year, body/interior in good shape, central locking not working -- I think I can fix given a free weekend. A few other problems mostly cosmetic. Aside from babying the engine (a big aside, yes), the car runs nicely. I avoid stop/go traffic when I can and keep putting oil in it. I assume at some point sooner rather than later I'll be calling a tow truck.
My main question is -- should I put any more money/time into this car? I have gotten great pleasure out of owning it and am truly in awe of the engineering -- 18 years of my abuse and it's still running. I've also gotten somewhat familiar with the innards of the W124, and think maybe I'd be better off buying a later W124 lower down on the mileage curve than putting more money into this one. Buying much newer is out of the question with the kids and mortgage.
I'd be interested also in what I could expect in cost for an engine overhaul. And lastly, can anyone recommend a good MB mechanic in Philadelphia, PA, Bucks County PA, or Trenton NJ area (US)?
Thanks in advance.
Lee Leitner
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Your car's engine needs a cylinderhead gasket at a minimum or an overhaul.
One can buy factory rebuilt engines or, used salvage yard engines for probably half the cost of an overhaul.
http://www.mercedesengines.net /
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Heck, you already took care of the tranny, replace or rebuild the engine and keep it for another 260,000 miles!!
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Get another W124 with same engine in better condition.... keep your old one as part car. I would not spend any more money in the condition as it is.
Like TG said... Top end overhaul is minimum... which is a big portion of buying another car in better condition.
Unless you want to sell your car as part car...I got a buddy who needs your tranny.
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