After flushing your self-levelling system with MB suspension fluid, check to see if the rear ride is nice & compliant & dampened. It should NOT be stiff or pogo-stick like.
If so, you could have bad accumulators (aka, nitrogen spheres) which are about $100/each.
If so, change them out, and flush again.
Don't forget to replace the suspension fluid filter as well.
For the diff, I would use SWEPCO 80W90 diff fluid (http://www.ritegear.com
); and only use MB power-steering fluid for your year 560SEL during the flush. Don't forget to replace both the PS lid gasket and filter.
I like to use ATE brake-fluid either their Super Blue, or their Amber fluid (both are the same, just different colors, makes annual flushing easier). Also, use a power-bleeder esp. with ABS.