I have some of the same symtoms on 94 E420. My system will blow cold air when the car is first started. The compressor engages and after a few minutes disengages and then cycles on and off with the on cycle a few seconds and the off cycle nearly 30 seconds. The air is then warm (but not hot as when the heater is on). I haven't driven it on the highway to see if then gets cool. I've checked the mono-valve and it is OK. When first turned on the compressor pulls the low side pressure down into the normal region and when the compressor disengages it goes back high. Neither fan comes on at any point during the first 10 minutes of operation. I haven't left it on longer than that. Both the pressure switch and temperature switch on the drier measure nearly 0 ohms with the wires disconnected.

Sorry, blueboxgeek09, I don't mean to hijact your thread. I plan to go do the tests mentioned tonight but my shop manual is still in transit so I'm pretty much in the dark as to the schematic. If anyone has a pdf of fan control schematic, it would help me out immediately.