$500.00 maximum. Drive it until it dies, part it out. Not much sense putting any money in it. The 230 was a bare bones model. Not much value in the engine. As always, it's not the rust you see, it's the rust you don't see.
The transmission, bell housing and clutch pedal assembly would probably fetch you a couple of hundred dollars.
I've purchased three w114 cars for $500-600. Barely running 250 sedan, and two non-running coupes. I sold the sedan running for $750, rotted worse than this one I think, and the old guy is restoring it. I got the nice but rusty sunroof coupe running and sold it for $2000. I never got the other coupe running and sold it for $800. Both coupes were flipped by the buyers for twice what I sold them for. So you see coupes are more valuable.
In 1969, I'm not so sure you'd say a w114 was the bottom of the line. There were always the w115 models below it. A 114 is a 6 cylinder /8, whether coupe or sedan. It happens that all coupes were 6 cylinder. You might say this was closer to the top of the model line sedan with a stick shift. I'm not sure, but that just might make it a gray market import. I think in 1969/70 the US w114 was a 250 2.5 liter. I'm not sure though.
More importantly, I bought a non-running 240d for $300 and parted it out. I got almost $500 for the interior, $550 for the manual trans setup, and there were a heck of a lot of other ~$50-100 sales, like: windshield, wheels, brake booster and master cylinder. It was work, but I enjoy doing that kind of stuff. $1500 for a running car isn't a bad deal, but you've got to know that you are getting into and that this car won't be a collector. However, it is fairly rare being a gas stick shift. That stick shift kit could make an injected model a holy grail car for someone. I believe it should bolt right up to any motor that went into a w114/115 car. I understand that the diesels are so slow that they really need a stick shift to be able to drive them in modern traffic. So the fact that you've got a running w114 stick shift setup, I think that draws a line somewhere (above $500 IMO) marking the bottom level price on that car.
So... $500. $1500. It sounds like the negotiating and bickering would be only about $1000 in difference. Let's see how good of a deal you can get.