Well, solved my seat belt problem today... here was the problem in case someone else can use the information.
Took the back seat out and removed the C-pillar trim to get access to the seat belt. Behind the trim, belt goes through a "slot" formed by two steel stampings. When installed, there is about 1/8 inch clearance between the two pieces.
Mercedes used a thick, rubberized sound absorber material on the inner surfaces of the C-Pillar. This material is super stickly on the side that adheres to the body.
Anyway, a piece of this material drooped (hot day last summer?)into the belt/slot and jammed the belt so it could not retract. The tensioner wouldn't let it go back out until is was fully retracted... therefore jammed in position.
Disassembled, cleaned, reassembled... and it works great.