It's typically agreed that the alarms on the W126, especially the Generation I, are not worth the trouble. I've got a 1984 300 SD and hooked up the alarm for the first time during my ownership after replacing the passenger door handle. It worked great for about a week. Then it rained and as I was driving down the road the alarm started going off. It continued to sporadically do so all the way home.

There are a few things you can check out but you'll probably be best to just disconnect the alarm. You can disconnect it by pulling up the passenger front carpeting, floor mat and beneath, and there should be an alarm controller in a black box. On the Generation I it is beneath a black plastic panel mounted almost vertically against the firewall.

Your problem might be water slipping through the window seals (which is normal). Unfortunately, if water gets into the two-pin connection that connects the car wiring to the door handle and tumbler, the alarm will be erratic. That was probably what was going on with mine.

The Generation II W126 alarms are more reliable so if you want to dump $250 bucks buy a new driver side door handle (which includes the alarm wiring and tumbler) and install it after removing the door panel. The control unit on the Generation Is are typically erratic, too, whereas your car, a Generation II, does not have this flaw. I've got a Generation II 420 SEL and have never had an issue with the alarm even though it is hooked up and operational.

Good luck

__________________
1984 300 SD 384,000 Miles