So I met with the regional director of parts and service for MB and went over the list of problems on the car. For the hard starting problem, they replaced all the fuel injectors and put in a fuel additive, for the squeaking steering wheel problem they replaced the contact for the horn and airbag, plus they did some other stuff, as long as the car was in the shop. The MB regional manager said the differential was behaving normally. He also added that MB changed the differential between '90, '91, and '92, stating that in '90 the car would engage in AWD silently but the differential tended to wear out, in 91 it engaged noisily but lasted longer, and in 92 they changed the design completely.
The result of the most recent visit:
The car is still somewhat hard to start
The steering wheel still squeaks
The car still shudders and makes a thunking noise when the awd engages.