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.
MERCEDES Benz Master Guild Technician (6 TIMES)
ASE Master Technician
Mercedes Benz Star Technician (2 times)
44 years foreign automotive repair
27 Years M.B. Shop foreman (dealer)
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190E 2.3 16V ITS SCCA race car (sold)
1986 190E 2.3 16V 2.5 (sold)