Sounds like the heater core is leaking or a hose connected to the heater core. The heater core is located in the climate control plenum/ducking - the exact location depends on the model MB you own. A shop manual will provide info about where to look.
America: Land of the Free!
1977 300D: 300,000+ miles
American Honda: Factory Trained Technician & Honor Grad.
Technical Advisor to Am. Honda;
Supervisor of Maintenance largest tree care co. in US for offices in Tex.