I have not heard of any service bulletin regarding replacement of the tranny fluid, it is a good idea, but that is not what MBUSA will tell you. In fact, I have had asked a couple of dealers to replace the fluid in my tranny, and they refused. I had the fluid in my transmission replaced at 70k miles by one of the moderators on the board, Steve Brotherton.
That is extremely high in price for a tranny. The tranny in the 97 E320 should be a 722.606, and you should be able to have it rebuilt for somewhere around $3,000, I would think. I think the list price for a new tranny and torque converter is just over $6,000 and it certainly does not take $1,000 worth of labor to R&R a transmission. Try to go the rebuilt route, a brand new one is too expensive.
1999 Dodge Ram 2500 Cummins Diesel
2002 Harley-Davidson Fatboy
Merlin Extralight w/ Campy Record