The 500E springs and struts being 3 inches shorter sounds normal to me. That just limits suspension (extension) travel, which you want for a lowered car anyway. I think the tech is just looking at the length differences and raising a red flag, not saying they *physically* won't swap. A lot of techs like repairing cars with the same parts that came out, not upgrading or swapping parts from a different car with the intent of improving it! That way it's not their fault when you don't like the new/different parts they installed.
I bet they will drop in just fine. But I've been wrong before, so keep us posted...
Regards,