W123tech,
I think that the cruise control system works by the actuator inputing a small amount of movement into the throttle linkage. If it's too much, it will surge. If it's too little, it will continue inputing until the desired speed is reached. If it's small enough to not provide too much of a burst, then it will be smooth.
It's like hammering down a nail on a fragile piece of wood. You don't want to break the piece of wood (finish) so you hammer the nail ever so gently that the nail goes in almost unnoticed.
Before this I attempted to adjust the linkage for max throttle so the throttle stop on the IP linkages is reached. I've attempted a DIY on it but it's very hard to explain. Here's another go at it:
Follow the throttle input from the pedal. In the above diagram on my car, ROD 1 will turn Clockwise from the view of a person in front of the car. This will turn LEVER 1 CW, and in turn pull ROD 2 to the RIGHT. This ROD 2 will then pull LEVER B1 Clockwise from the diagram's point of view. LEVER B1 and B2 are connected via a bushing on their axis AND the indicated BUSHING. This BUSHING is the one I mentioned that has some slack in it, so what I did before was to compromise for the slack which led me to put too much input on the cruise control part. Anyway back to the diagram, when LEVER B1 turns, it will pull LEVER B2 and consequently, ROD 3 in the same direction, CW for the lever and to the RIGHT for ROD 3. ROD 3 will then push on LEVER C (emergency shut off) to push onto ROD 5, which will then push a lever on the injection pump and into the throttle stop via 2 or 3 more linkages through a spring.
Adjustment was at ROD 3 near where the BUSHING is. If you look at ROD 3, there are two ends. From the viewpoint of the diagram, the upper balljoint is the one I adjusted. There will be two nuts, a 12 and an 8mm. The 8mm is the locknut, which is on the bottom. The 12 is the top one for the ball joint head. What I did is loosen the 8mm bolt on the bottom and pull LEVERS A and C to FULL THROTTLE or towards THROTTLE STOP. You can see it when the throttle stop pin contacts the bolt on the IP. It is best to have somebody hold this for you while you adjust the bolt (8mm). When adjusting this bolt ensure that the BUSHING is at its other end of the slot. Then back it off a little to compensate for wear. LEVER B2 and ROD 4 is part of the cruise control linkage mechanism so that's where you focus on.
This is where the mystery part comes on, how much adjustment is necessary. Well I did not intend to remove the surging, I just felt I overcompensated for the throttle stop so I maxed it out. The power was quite raw and I wanted the smoothness back so I just backed it out a bit.
Make sure to keep the LEVER A and C at throttle stop!! Otherwise any slack in this will not adjust the linkages properly.