When I did my 240D (upon convincing from the kind forum members who saved me paying the dealer), I got away with just using just a (beefy) paperclip to get the cylinder out. That security lock looks interesting... The W124 was a little more of a pain with aligning the cap, but still pretty similar to the W123.
When I went to the dealer, after making a copy of my registration and ID, they had to go outside and check the VIN and test the key in the door (I ordered a valet key for the sum of $28). I'm kinda glad he didn't try to open the door after unlocking it with the new valet key...as it would most likely have set off the alarm
I really think it's a lot simpler to get these right away when you're having key trouble...15 minute job versus probably at least a couple hours (and some hair).