The W124 chassis sunroof isn't what I would call problematic. The W126 chassis(1986 & later) did have twice the problem with less than 1/3 as many sold. However the parts on both cars are made the same, so after repeated use they can be subject to failure.
That estimate is HIGH & I haven't ever seen any repairs that were with-in $400 of that, even with a new headliner.
Labor rate around here is $90 @ hr. & the job should be around 4.5-5 hrs.
IS there a hole in the headliner? Many times they can be removed & then re-bent back into original shape.

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