Thanks for all the input/encouragement. It's good to see others have survived similar situations, or worse ... poor Bob's rocker rust made mine look pretty good! I did more inspection of the area and can see what happened. The bottom of that jack support is supposed to anchor to the bottom of the frame behind the rocker, and mine pulled loose. The top is fine ... in fact, if you look up under the rocker, no rust is visible on the frame of the car. It just a disaster in that one area. I'm really impressed with the bodywork others have done here and I wish I could weld. I'm reading up on welding, but it might have to hold off until I have my own garage.
In good news, I bled the front brakes and they're fine now. So I can drive the car ... I just don't want to until I get the flex discs and diff bushings done.
Just to clarify ... in searches of the forum I have found some people say NOT to jack up the w124 by the diff. Thoughts? Alternatives?

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1987 300D, arctic white/palomino--314,000 miles
1978 240D 4-speed, Euro Delivery, light ivory/bamboo--370,000 miles
2005 Jeep Liberty CRD Limited, light khaki/slate--140,000 miles
2018 Chevy Cruze diesel, 6-speed manual, satin steel metallic/kalahari--19,000 miles
1982 Peugeot 505 diesel, 4-speed manual, blue/blue, 130,000 miles
1995 S320, black/parchment--34,000 miles (Dad's car)