Has the car ever had a blown head gasket, where oil entered the coolant? The 300E has 3 coolant sensors, 1 gives reading on the instrument cluster, a second activates the emergency AC cutoff under high temps and the 3rd supplies the KE control unit with info to regulate the system.
They can all be found on the left side of your engine head (driver perspective). It sounds like at the least your temp sender sensor is bad, giving you a low reading. It's a single pole sensor.