What I've learned about the year you're looking at:
- Beware of the 53 block
- Lift pump problems (most everyone replaces it)
- make sure the injection pump hasn't been messed with (Fuel pressure gauge is a good sign it has been.)
- Interior is shit, falls apart..but who cares?
- 118k miles ain't shit on that engine
- Maintenance done properly/on time?
Other than that, you need to be ready for the maintenance required in owning a diesel. It ain't cheap.
The manual transmission has its fair share of problems too. I wanted a manual tranny as well, but I am more than happy I chose the automatic. When I think about the amount of time I'll be spending in the seat when towing the XJ behind me, I'd rather have the auto.