Mileage
If properly serviced and looked after, it should do twice this mileage without major repairs.
Check:- when was the timing belt last changed - make sure you KNOW, and if you don't have proof, get it changed immediately after purchase. If it is a 300Tdi there was an issue with the cam belt idler, but this would have been fixed for sure by that mileage.
Find out if this is one of the ones with a wear issue on the gearbox mainshaft output gear splines, and if so, has it been fixed? Probable major expense if not.
Steering box could be getting tired if it is the original, and these are not cheap - check for leaks, could be a reason for asking for a price reduction.
At that mileage you cannot expect it to be perfect, but there should not be any major problems, but you could have things like brake discs/pads/calipers/master cylinder needing repair soon, tie rod ends, suspension bushes, A-frame ball joint, prop shaft U-joints, door locks, door seals, door hinges, etc, none of which are expensive (well depends what you call expensive!) but they can add up very quickly.
Diff lock - this locks the centre differential - it is then the same as your S3 in four wheel drive. Probably stiff to engage because it has rarely been used.
For inspection I would suggest Fred Smith at the end of Havelock Rd in Wantirna - see phone book, trades as Fred Smith Four Wheel Drives, I think.
John
JDNSW
1986 110 County 3.9 diesel
1970 2a 109 2.25 petrol
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