I managed to get the crankshaft pulley off. First I tried a 1/2" impact wrench with no success - the compressor I borrowed was a small unit (3CFM).
The method I used to get the crankshaft pulley off was to put a 1/2" breaker bar on the 17mm hex bolt and have the breaker bar pointing down. I wedged a 3/8" drive extension between the pulley holes and the engine block. With the front of the car jacked up I used my legs to apply force on the breaker bar. With alot of force I broke the bolt free. The crankshaft bolt appeared to have blue locktite on the threads which I will reapply.
Removing the crankshaft damper I noticed that the outer pulley worked its way toward the engine leaving a slight gouge in the engine block (slight amount of oil seepage). I applied some JBweld epoxy to fill in the gouge.
All that remains is a new crankshaft damper and drive belt. I was lucky that the crankshaft dampner went at 35 MPH instead of 75 MPH and did no engine damage.
I would encourage that anyone doing their own repairs do a through inspection as apposed to just replacing the defective part.
I thank everyone for their suggestions. Mark, since I purchased my Mercedes used from a private owner already out of warrenty, I felt that Mercedes did not owe me a break. Besides doing the job myself all that I am out is the cost of the part and I have gained knowledge repairing my Mercedes. This is also how I can justify purchasing new tools to my wife.
1998 Mercedes E320, 200K Miles
2001 Acura 3.2TL, 178K Miles
1992 Chevy Astro, 205K Miles