Thanks everyone for all the help-
Here is my progress report.
I dismounted my tank - cleaned it out and then boiled it - I did find oil residue and believe my tank to be in good condition. I didn't mention that my car had been in poor storage as part of an estate for 11 years and I should have taken the time to clean out the fuel system completely.
I put everything back together including a new set of spark plugs, high tension coil etc. The engine started out fine - after about half an hour idling I could smell the exhaust had traces of a rich fuel mixture - went back to our web site and did some 'education', I noticed that while my engine was hot, the water line to the MI pump was cold!
Checked for a missing thermostat on the engine and sure enough it was missing. I found the thermostate part # 110 ..... at the local Mercedes dealer and fitted it and so very slight improvement in the temperature of the hose. Decided to dismount and check the thermostat on the MI pump and to my disgust it was completely clogged with rust and silt - I suspect the previous owner foolishly used plain water and no coolant.
I marinated the unit with a little break fluid for about 8 hours and washed it out clean. I found no washers and would have removed it anyway. Put everything back together and ran the engine - this time the temperature in the pipes and the thermostat housing rose with the engine and the engine now ran dramatically better and wasn't wetting sparkplugs anymore.
I would say on the whole I am very happy to report seeing a 90 % improvement but smoke due to rich fuel mixtue is not totaly elliminated. I am planning to go for a test drive this weekend to see if I can burn any residue in the exhaust system - but should the above condition be acceptable if the engine has been idling for a good 3 hours without being driven out on the road or should all smoke be elliminated? Does this make sense?
Also, I can hear a very slight moaning/crying sound coming from my MI pump - I can hear this same sound a little more exagurated when the engine is not running and the ignition moved one click thereby turning on the pump? I apologize if this is not clear. BTW the fuel in my tank now has no trace of oil or any other contaminant. Thanks for all the help and its great to have access to all this priceless info
Workineh Yemesgen
1952 Chevy Styleline
1954 BMW 502 V8 Ex-Haile Selassie
1957 Mercedes 190 Ponton
1957 Mercedes 220 Ponton
1961 Mercedes 180c Ponton
1964 Mercedes 220SE Fintail
1965 Mercedes 230 SL
2003 Mercedes G 270