1985 VW Golf Diesel, is it worth $3450?

[Naki]

I have just lost my '82 Mercedes diesel and am looking for a new diesel. For as long as I can remember I have wanted a VW and this has showed up. It has 148,000 miles on it and seems to be rather clean, I don't know about the tan color though(it's just aesthetics). $3,450 seems a bit much for it, but otherwise is it a good car to grab? However, my insurance is giving me $2,300 for the loss of my other car, so it's only 1200 out my pocket. Still seems a lot though. What is a reasonable price for this car?

I am also looking to convert it to vegetable oil and the fuel mileage is great. Should I just get an expensive TDI, or how do you feel about the subject? I feel the older engine will run on veggie oil better than a TDI and would be less of an investment. I love that it has a five-speed, something a Benz could never have in the US. I plan on doing all it's maintenance, anything I need to specifically look at, reasonable price for parts?

Thanks for reading my rambling and for any of your help. Also, is it possible to add a turbo without ruining the engine, is it a lot of work?