Could it perhaps be a clogged cat? Only I reason I suggest that as a possibility is that your symptoms are exactly what I was experiencing recently with my 95 E300D. Disconnected the exhaust, and voila, power was back and smoke was gone. Replaced the cat and everything works perfectly.

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14 E250 Bluetec 4Matic "Sinclair", Palladium Silver on Black, 159k miles
06 E320 CDI "Rutherford", Black on Tan, 179k mi, Stage 1 tune, tuned TCU
91 300D "Otis", Smoke Silver on Tan, 145k mi, wastegate conversion, ALDA delete

19 Honda CR-V EX 77k mi
Fourteen other MB's owned and sold
1961 Very Tolerant Wife