MB "goodwill repairs" are usually done if you are the original owner, bought the car at that dealership and have had it regularly serviced there. I have yet to hear of any dealership that would eat the cost of this repair if it were otherwise. MBUSA will not acknowledge anything about this repair even if it is a well know bugaboo.
$800 is a good price, about what I paid, although I think 5 hours is way too long to do this. An experienced MB Tech should be able to do it under 2 hrs, it is only a matter of unplugging all the connectors, taking the old harness off, then threading the harness through the engine compartment and plugging in the new connectors. Some disassembly may be required as there are some pretty tight spots where you need access.
Someone once posted about the history of this misbegotten use of biodegradable insulation. I don't think it was meant to disintegrate while in the engine
. Someone took a shortcut somewhere and did not do the appropriate thermal decomposition testing. I believe it is the heat in the engine compartment that causes the problem. Even then, it is not as bad as with some other car makes where the insulation crumbles to dust!