Can someone please help me identify the part circled in the photo. I have done quite a bit of searching and even running part numbers and even still I have not been able to identify it.

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That is the Rack Position Sensor.

X2 Rack position sensor (part of the EGR contol system)
Mercedes-Benz Forum - View Single Post - Has anyone removed a rack position sensor

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78 W116 300SD 'Desert Rose' new as of 01/26/2014
79 W116 300SD 'Stormcloud' RIP 04/11/2022

Thanks guys. This is my 3rd Swap into The Toyota 4x4 pickups but it's this first time coming across this mechanism.
Matthew.

The rack position sensor started ~1984. It is only for the EGR controller and is not necessary. Downside is that it makes it much harder to get at one of the 3 mounting bolts.

Scary that the delivery valve outputs aren't capped, with all that gunk on the IP. I suggest turning it over with the engine to flow diesel out each port before connecting the injector lines.

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1984 & 1985 CA 300D's
1964 & 65 Mopar's - Valiant, Dart, Newport
1996 & 2002 Chrysler minivans

Can you just remove it or does it need a custom cap made to seal whatever is behind it?