Tom,
It would be really unusual for a spring to go that bad, that way. Not impossible, but unusual. I think the shock is completely blown and may even be sticking compressed. Remove the shock and see what you get. Use the Search tool for threads on suspension and springs. There is a lot of ground already covered. Although, I don't recall anyone every having your particular symptom.
As to parts suppliers, there are some listed on this site. Yes, the parts are expensive, but you can still get most of them. If you call the Classic Center and tell them you are a member of the club, Tom Hanson is usually able to extend a club discount. Might offset the cost of shipping at least. Our local dealer, Brumos, extends a 10% discount to MBCA members. The good news is that shock absorbers are the same price as for any other car. Bilsteins were OEM and you can still get them in regular and sport for reasonable prices at many outlets. If your screen name, "Dirtrack" means you like a little better performance, I'd recommend Koni Classics. More expensive but adjustable. I think that German rubber is the best there is. However, what is under your car is over 40 years old. So you may want to plan on replacing it all a bit down the road. There is also an aftermarket Urethane bushing kit if you want to firm up the ride.
Good luck and let us know what you learn.