Ive found that the wires in the plug to the intake cam advance magnet are the easiest to inspect for failing insulation. It may be necessary to remove the plastic connector from the wires to see the insulation. I agree with Suginami, its not a matter of if its going to fail, but when.It does seem to be related to heat. Having worked at dealers in the Atlanta area I relaced many of these harnesses on cars before the warranty period expired. It does seem that when the problems arise its after the harness has been disturbed, such as when plugs are replaced during routine service work.You should have no problem doing this repair, it is fairly easy on a 124 car.
Mercedes Benz Master Tech