First let me say I’m sorry that has happened to a car that you have such fond memories with. Second I have no experience with 240Ds. I have a newer model.
I just read the post much like Junqueyardjim. It has been 9 months since you first posted and no ones really knows what is wrong with your car.
You say there was a puddle of oil under the car and that the crank is full of oil. That doesn’t make sense to me. So was it oil? If it was oil, did it come from your car? Your “friend” was able to blow up the engine or crack the block on a 2 mile trip to the mechanic? Is that even possible? 240 people please chime in.
If it were my car I would:
1. Determine what my budget was.
2. Find someone to look at the car.
Can you take it off the island to one of the other islands?
Can you hire a mechanic from one of the other islands to come and look at your car where it sits? When I was there inter island flights were not that expensive. Is there anyone else with an older diesel MB on the island you are on? If so can you ask them who does there work? If not can you find someone on another island with a MB diesel. There must be several on the islands.
Try contacting Pacific Biodiesel
http://www.biodiesel.com/map.htm. They are located in Oahu and Maui. They may be able to recommend a mechanic to you. I’m sure there are several MB owners using their product.
Good luck and keep us posted.
Chris