I will second the suggestion that the W124 cars with the OM60x series engines were a big step forward. Especially the 6cyl versions. Holy grail of those is the 1987-only 300TDT wagon IIRC. As far as old style mechanical injected prechamber diesels go that OM603 is pretty well bulletproof and the W124 is a nice car and modern enough to be a good car to use daily. The turbo 603 engine had something like 140hp and could really move, plus very refined and also more efficient than the old 5cyl OM617 engines in the W123 cars.
Best I can remember, their only real downfalls were the trap oxidizer that needed to be removed from the exhaust, and some cars got a flawed cylinder head casting that liked to crack and needed to be replaced with the updated part. Probably most of the cars still on the road today have had that done by now.
Personally the W123 cars and the old OM616/7 engines never seemed worth the hype to me. The basic cars were solidly made, but little stuff always was going wrong.... oil cooler hoses, motor mounts, endless vacuum system issues, throttle linkage, driveshaft guibos, etc etc etc. Hard starting in the winter, or no start at all if you had even one or two glow plugs out. Climate systems were an endless PITA, power windows and their switches always were failing, etc. The 300Ds with more luxo features were worse for the interior part failures and climate issues, and automatic transmissions were common for causing trouble or failing. Poverty spec 240Ds with manual transmissions were simpler and had fewer problems in the interior and powertrain, less of a constant effort to keep those cars going. But the 240Ds were total dogs that got only 30mpg or so, pretty much unsafe on anything other than city driving or a dead flat highway, and even the turbo 300Ds were still heavy and slow and even less efficient, lucky to get low 20s for real world driving in the experience of our customers at the shop where we used to work on a lot of them. For the same size and age vehicle, a Volvo 740 turbodiesel with the VW D24T was more spacious, better built, much lighter and more nimble, much faster, quieter, smoother, cheaper to maintain, and about 5mpg more efficient. I never understood why people bought Mercedes instead of them. Same story with BMW's E28 524td available in the same era. Better in every single way. Have to figure folks were buying the MB cars over those others because they were the the bigger status statement at the time, and that's why there were so many more of them sold.
Contrary to the legend, we also saw a lot of those OM617 engines just simply wear out. Low compression. Many of them around 150k. They could last a long time for sure if strenuously maintained, but they weren't bulletproof, especially in the hands of owners who thought "bulletproof" meant "low maintenance". We saw timing chains stretch and break too, turbos fail, etc. The OM617 shared its design roots with Mercedes diesels going back to the 1950s or earlier, no joke. By the '80s they were antiques, to say nothing of today in 2022. 70-80 year old design principles, looked like something from the stone age when you had the valve cover off. Every other diesel on the market was more advanced, especially the lightweight VAG and BMW diesels. Fortunately the OM60x motors shared nothing with the old OM61x and brought them into the modern era finally.
I did like the W126 platform cars better than the W123, but the problem (IMHO) with those was that you could only get the short wheelbase "SD" models up until 1985, using the old OM617 5cyl engine. In 1986 they changed over to the new OM603, but you could only get it in the long wheelbase "SDL" body. Couldn't understand why they made that decision. That was just too much car for most uses, almost like a limo, although they still drove very well even with all the length and weight. The best combo would have been the short body with the late 6cyl engine but as far as I am aware, that was never available in the US.
I could imagine considering a nice W124 or W126 car with an excellent mainteinance history and no vacuum or climate system issues if one turned up. Still a costly to maintain and not-that-efficient vehicle with irritating problem areas, but nice enough to drive that it could be worth the effort to keep one going. But I don't think anything could convince me to live with a W123 or earlier.
The simple answer to OP's question -- yes they are money pits, all of them. If you're gonna buy one, spend the money upfront and get the absolute best one you can. The old saying goes something like, "there is nothing more expensive than a cheap Mercedes" and it's true.