Yup, it does. I am actively looking for a 240d now. Found some real nice candidates on CL but hard to get many of these guys to respond. There is a real nice 79 300d locally with 140k, no rust and runs well but has an a/t and he won't go below $2200. Plus it is that mercedes mucus yellow, my least favorite color.
FWIW you won't find a U.S. market 300D with a manual transmission. They only sold automatic 300D's in the U.S. There are some gray-market (built for and sold in Europe, then imported post-sale to the U.S.) naturally aspirated 300D's with 4 speed manuals (and a VERY few '84 and '85 with 5 speed manuals), but they're very rare and command a high premium.
This is just my opinion, but I wouldn't waste my time with naturally aspirated (pre-1981) 300D's for a couple of reasons.
First, it's not really practical to convert a n/a 300D to a turbo; there were a number of internal changes i.e. different valves, and simply slapping a turbo exhaust manifold on a n/a 300D is going to shorten the engine's lifespan.
Second, I mentioned in my earlier post that W116 chassis cars have a very problematic automatic climate control system; this also applies to pre-'81 W123's. The ACC on '81-'85 cars has issues, but is generally more reliable and less expensive to repair when something does go wrong. OTOH that's one big plus to the 240D; they have manual climate control systems.
Third, IMHO it's the worst of both worlds...you won't have the power of a turbo 300D (believe me, that turbo makes a big difference), and you have one extra cylinder to feed compared to the 240D.
If you're willing to have a project car, IMHO the ideal setup would be to get a 240D with a 4 speed manual and manual climate control, windows, etc. and swap in a turbo OM617 and rear axle out of a turbo 300D. That'll give you the lower freeway RPM's and better power (doubly so without the loss from the slushbox), along with the reliability and simplicity of a manual transmission and manual climate control. The later model ACC works nicely when it works, but is a major pain to diagnose when it doesn't work (being patient, having small hands, and being proficient with a MityVac will make life much easier)...and, I have yet to see an earlier model ACC setup that worked properly
BTW, I agree with you about that mucus yellow
also, as much as I love the reliability of the W123 chassis, both of the 300D's that I owned have turned me off permanently to tan interiors...give me black or blue or gray or even bordello red
but I'm sick and tired of looking at tan interiors!!