Has anyone ever rebuilt a 300sd diesel engine,what did you find
when tearing it down,were the pistons still in good condition,and what
shape was the cylinder liners in.Are the cylinder liners prone to wear.

No need to replace the piston. You do need to replace the rings and have a
new cylinder liners pressed in. The cylinder liner is a high wear item which
over time and age will become 'ovalish' shape.

About 10 yrs ago, we rebuilt our 300D engine. Had the cylinders honed
by a machine shop and put new rings on the pistons that were one size
larger.
Car was awesome after re-installation, lot more power/torque. Drove it
for another 6yrs before selling.