W126 Dashboard Replacement/Removal Instructions
Here is a DIY article I wrote on dashboard replacement in your car. It's a big project but if you start early and don't run into any problems you can finish it in a day. If you are concerned about cosmetics - I would recommend removing all the dash and door panel wood and sending it to Heritage Woodworks. I wouldn't normally recommend this project as a stand-alone but if you are going through the trouble of doing the dash you should do the wood, too. He has a special formula that improves the wood on two levels: (1) The wood will never again separate from the aluminum backing and (2) The clear veneer that goes over the wood will never crack. Something to think about.
It's been 10-15 years since I got my sheepskins, so I can't tell you where I got them - the place may not even be in business anymore. I think GAHH sells them. If not, get the MBCA Star Magazine and look in the back pages at the advertisements. Just make sure to buy the good ones. They will probably set you back a couple of hundred dollars for both front seats but will be a tremendous investment if you are trying to protect your leather. You will definitely want to treat it in the meantime as well.
With reference to the rust post: if I were buying this car one of the first things I would do is remove the battery and check for corrosion on the battery tray. Then take the battery tray out and check for corrosion underneath. If your battery tray is starting to rust, replace it immediately. It sounds like this is a good car so any rust beneath the tray is probably minor.