mercedes with high mileage question

My wife and I have long considered a used mercedes as an alternative to a new car with less than desirable features/maintenance issues/cost etc...
We figured on spending 5K or less and found one this weekend. Seemingly
good car ('86 190D 2.3), minor cosmetic on exterior, near zero cosmetic interior (excellent leather condition), odometer read 205K.
'Got it home, read all books in glove box only to find major discrepencies in mileage reports. Could be as much as 250K+ difference! Carfax and Experien both report no odometer tampering but list "EXCEEDS MECHANICAL LIMITS" on report.
On driving, it is smooth shifting, powerful, a few creaks or noises, could possibly use new discs but not much else.
Do we report? Do we take it back and demand money back? Do we worry about mileage problems on resale or do we resign ourselves to the situation and be happy we got what we were looking for?
Help for a mechanically challenged individual is greatly appreciated.
-BJC
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If you're mechanically challenged these old cars are NOT for you. The reason is that they are very expensive to have repaired so they are only a bargain for a DIY owner, not someone who drives to the shop and says "fix it". Old cars need repairs, regardless of make because ALL cars eventually wear out - the only question is how eventually.
However, you seem to like this car. So if you want to keep it take it to a M-B shop and ask them to check the engine's compression. A diesel is a compression engine and its compression is the only valid diagnostic as to its remaining useful life. Dump it if any cylinder shows low compression for it will sooner rather than later need an overhaul.
Next time shop for a 1983 - 1985 300D Turbodiesel with about 150K miles - at 250K miles, unless its been very very well maintained, it's probably getting close to needing engine and transmission overhauls.
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