If you failed suspension test, it is the shock absorbers that failed. The
one that is on your car is hydropneumatic version and are very expensive...
Autohausaz.com is normally the cheapest source where I buy all the time is
$404 each side. Other places are nearly $100 more each side. The good news
is I found one much cheaper on ebay for you...

http://cgi.ebay.com/ebaymotors/Mercedes-Hydro-shock-W124-300TE-Mtc-300TD-87-93-W
agon_W0QQcmdZViewItemQQcategoryZ33590QQihZ011QQitemZ320123764482QQrdZ1QQsspagena
meZWDVW

You should also replace the air cell and have the mechanic check other part
of system. Just to let you know... if you let your mechanic buy the parts
for you, he will charge anywhere between $540 and $782 PER SIDE plus his
labor.

If know how to work on cars, you can save more money with with service
manual to guide you.

I know it sounds very very expensive but it is a necessary part to repair
your car...I am pretty sure you got high mileage now... and on original
equipment... it is worth it... long life.

cheers for all the responses so far
well the ride height seems ok so unless the 'struts' are leaking they should
be good?
and if the ride height can be changed via the adjuster on the valve, that
should be ok,
I can assume the accumulators are shot due to ride quality so -

-is there any way of checking the pump?

-are there any filters in the system, would it need flushing and if so what
with,

-will LHM fluid damage the system ? reason I ask is last year I had a burst
in a steel pipe and the garage didn't mention ZHM, so I think they may have
refilled with 'ordinary'..

cheers again

I have a 1982 300 TDT with the load leveler.  Your problem, as others
have written, is most likely the accumulators.  If the struts are not
leaking, they are probably fine.

This place has accumulators at $90.36 for my car.  http://www.germanimportedparts.com
They are in the "Chassis and Steering" section of the catalog.

Maintenance of this system is easy to do and very important.  You
should change the fluid annually.  I do not use the expensive Mercedes
hydraulic oil in my TDT.  I use regular dinosaur oil based automatic
transmission fluid.  I use the Chevron brand in the blue bottles you
can get at Costco.  You change the filter too.  German Auto has the
filters on the same page as the accumulators.

If you want to see if your pump is working, all you need to do is go
under the rear end and find the control valve that is attached to the
torsion bar and the oil tubes that run to the struts.  On the control
valve you will find a bleeder valve just like you find on a brake
cylinder or slave cylinder on a clutch.  That is how you bleed the
system when you change the fluid.

Open the bleeder valve (it should have a dust cap on it), and then
start the engine.  You can see if the pump is working because if it is
it will pump out all the old fluid from the reservoir under the hood.

After the system drains, close the valve and put on the dust cap.

Then, replace the filter in the reservoir under the hood and refill
the system with automatic transmission fluid.  The filter is held on
by a spring that has a hook on the end that you can't see because it
is in the filter.  You have to compress the spring and unhook it.  You
will see what I mean when you start working on it.  Disconnect the oil
line to the top of the reservoir before you remove the big cap, the
one you have to unscrew.  Disconnecting the line first will help
prevent bending it and if it gets bent it will be hard to put it back
on.

I have run my system with automatic transmission fluid for more than
200,000 miles and my system works great.