my 420SEL had the same symptoms. Turned out I had a broken rear coil spring. Replaced both of those in the rear and the problem was 90% fixed. Replaced control arm bushings and car is 100%. My mechanic diagnosed all of these problems in a short amount of time. He suggested we do the coil spring first and see how it was as the control arm bushings were worn, but still looked ok. Big difference, but I wanted perfect so we did the control arm bushings next and I got what I wanted.
1995 E420 - retired
1986 420SEL - retired