The parking pawl is inside the transmission and locks the gearing to keep the car in place while parked. the sharp blow to your car broke or dislodged yours. Yes, it needs to be repaired. Not sure if driving it is advisable--better check with an MB tranny guru. Good luck.
'02 C230 Kompressor
'89 560 SEL "Frau BlueCar" (retired April 2004)