Here are some quick thoughts:
Have somebody sit in the car and select the CD input while you listen to the changer. See if makes any noises such as loading the disc, spooling up the RPMs, searching for the index. If you don't hear a thing, then maybe it's an electrical connection.
If you do hear it trying to do something, use some canned air on the laser assembly - some dust may have built-up on the optics. The laser units don't last forever - usually around 5 years.
If you think it is electrical, disconnect the CD changer and test the input plug into the changer with a volt meter. With some trial an error you probably should get some voltage jumps as you press the change disk button, skip track, etc. I don't think MBZ started using optical links until the late 90s, so your "should" be electrical. This should help rule the head unit as the problem.
Before going to MBZ, you could stop by Circuit City, etc., and have them check it out too - they probably won't charge you since they assume you'll replace with a change from them. I don't know MBZ, but the Alpine changes seemed to be "the" universal changer which worked in alot of cars. Called the CD Shuttle, the cost around $250-$300 and sometimes you need an adapter which costs around $75. I'd expect to pay around $400 to $500 if you opt to have Circuit City, Best Buy, Car Toys, etc. put in an after market unit. Just a benchmark to compare the replacement part cost with.