I also "third" that. I would almost be positive that your problem is due to a worn valve guide. However, should your problem extend elsewhere, I would give Metric Motors a call. They are probably the best MB engine rebuilder. Pricey, but they do good work. If the rest of the car is in good shape and you would prefer to keep it, than by all means go for the rebuild. Figure a fresh engine is much cheaper than a new car!
'67 250SE Cabriolet
'93 300E 2.8