It was the fuel! Turns out the stuff the PO left in the tank was some sort of rancid oil/diesel mixture, my guess is a homemade biodiesel. I drained fifteen gallons of the nasty stuff from the tank, pulled it and cleaned it out with soap and detergent and then rinsed with acetone to dry the thing out. After cleaning the screen and replacing the fuel filters and soft lines, the thing is running like a champ- smooth idle, no smoke, and decent acceleration from a dead stop. Acceleration above 40 is pretty weak however, and it only tops out at 65/70. Injectors, perhaps?

The ironic thing is I would have found this out three weeks earlier if FedEx hadn't messed up the delivery for my diesel purge kit. I had already almost despaired about ever finding the problem, but figured since I'd already bought the kit I'd as might as well use it. As soon as the idle smoothed out I smacked myself in the head. It was the fuel all along. Just goes to show what happens when you don't keep it simple. I could have avoided a whole lot of work and stress if i had eliminated that as an issue before tearing through the whole engine compartment. Instead I got distracted by long shots and by the time the purge showed up at my door I'd put dozens of hours in checking long shots.

I want to thank everyone for their knowledgeable and patient advice. I've had this car for only six weeks now but I already know worlds more about it and how it works, and i really owe a lot to this forum for that. Oh, and sorry it took so long for me to update, but i was having way too much fun tooling around town in my newly working luxury automobile.

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1986 300SDL: 386K, 200K on Engine w/#14 Head