I owned both a 1990 1.6L VW Jetta GL diesel (naturally aspirated) and its older cousin, a 1980 Rabbit 1.5L diesel. Here's what I can tell you...
The 1980 did start and run. The seller drove it 50 miles from Somerville to my house in Worcester. The brakes were almost useless. I replaced a lot of parts, but never got that fully sorted out. I think I may have had a bad booster. The engine had unknown history, but I owned the car from late 2008 to mid 2009 and it did run.
That car's two real problems were rust (the main reason I sold the car without doing much to it) and a completely worthless electrical system. Only half the electrical items worked, and there was a short somewhere which drained the battery if left hooked up. Engine seemed OK, but I did not know its history.
I had my 1990 Jetta from November 2010 to March 2011. The body was in pretty good shape, and it ran pretty well. The 5-speed manual transmission had one of the most satisfying-feeling shifters I've ever experienced. The engine seemed basically solid, but suffered from the common problem of destroying alternator belts every few hundred miles. There's something in the design of the belt drive on these cars that, when aged, destroys alternator belts. Nobody has successfully solved this, except for a few people who have transplanted serpentine belt setups from later VW diesels.
The constantly-shredding belt made the car unreliable for me. Also, the suspension kept wanting to come apart. New shocks didn't help much. Maybe if I'd used higher quality parts, but I was used to putting cheap parts on my old Subaru (the cheap aftermarket stuff for Subarus actually tends to be pretty high quality).
Also, when I sold the car, the buyer suspected a head gasket leak. I wasn't aware of anything, but I let him use that as a bargaining chip because I wanted and needed to get rid of the car.
Mine had around 200K miles on it. I've seen similar cars with a LOT more miles. Having been around Volkswagens a LONG time, my impression is that they will reflect Mercedes diesel longevity, but require a lot more in the way of maintenance and repair. It seems to me that it's WAY more expensive to keep a VW running (reliably) that long. Plus, at the end of the day, it's still just an overpriced Volkswagen.
Don't get me wrong, I love Volkswagens. I've had my Vanagon now for almost 11 years and have no plans to get rid of it. But, the key to buying an old VW seems to be to find one that's nearly perfect, and then keep it that way.
I don't mind reviving a basket case Mercedes, but would never again try to save a basket case VW. Just my $0.02.
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