Hello,
I am the (otherwise) happy owner of a 350SE automatic from 12/1977 with a M116.985 engine with K-jettronic ignition system and 327.000 km on the clock. I bought the car back in February, and most of the season went with body repairs and repainting. But now I have put my attention to the engine, and the following jobs have been done up to now to make it run better:
1) K-jettronic system was exchanged and sourced from a donor 116.985-engine with (a claimed) 160.000 km on the clock. This included also the warm-up regulator unit.
2) All injection nozzles were replaced to new ones from BOSCH.
3) Fuel filter (the large one) was replaced to a new one.
4) All spark plugs were replaced with new NGK BP6ES plugs. Old plugs all looked fine - no oil on the plugs.
5) Spark plug wires were relatively new already, but I measured that they all have a resistance of around 1 kOhm. We removed the metal shield from the plugs at the nr. 1 and 5 spark plugs respectively, because we registered a spark between the 1 & 2 and 5 & 6 plugs, because these plugs are placed very close to each other in the M116/M117 engines.
6) Distributor cap was changed to a new one from BOSCH.
7) Rotor with rpm limiter was changed to a new original from BOSCH.

Ignition coil was changed to a new from BOSCH.
9) Both ballast resistors (0.4 and 0.6 Ohm) were changed to new ones.
10) I have adjusted the warm idle (750-800 rpm) CO% to around 2.0%CO.
11) Compression checked out nicely with 164-179 psi measured across all eight cylinders (even with a cold engine).
But even though all this made the engine a lot more responsive, when running warm, I still have two big problems, which I cannot figure out how to improve:
A) It fires up fine cold and very shortly goes to around 1000 rpm as it should. But then after 2-3 seconds it drops down to around 700 rpm and runs very unevenly. First after a couple of minutes with continuous driving, it starts running better and more evenly.
B) When warm and after standing turned off for a few minutes (or longer) it is extremely difficult to start. It never fires first time no matter what I do with the gas pedal. Only the second time it fires after cranking for 5-10 seconds and
only with the gas pedal all the way to the floor! I can add that it behaved in the same way also before I changed the K-jettronic system and warm-up regulator, though as both systems were used they could suffer from the same problem, but just seems unlikely.
I would appreciate some tips on how to proceed from here to cure the two problems (A & B) above.
I look forwards to hear from you and thanks for your help.

Cheers,
Christian