I track my Merkur XR4ti over here in the states. Not the same engine (I have a 2.3 SOHC Turbo) so I can't help much with the engine issues. However, for a power steering cooler I got a nicer universal cooler and put it under the fender well.

Scroll to the bottom of this page for pics of the cooler: http://www.85xr.com/Steering_Rack.htm

Hope that helps!

Peter