Yep. I posted a very detailed thread about how to replace. If I had a digital camera, there would be pics to help you through!
Nothing wrong with the switch, it's a $17 component residing in the seat itself. The plastic clamp in the component fails in 99% of the W124 series. It can "push" the headrest upwards through inertia, but since it can no longer "clamp" onto the headrest shaft, it is unable to pull the headrest down on the return trip.
The replacement item is cheap and easy to replace...about a 10-15 min. job. You must remove the seatback to gain access. It's a bit tricky, but is doable, and definitely more difficult than the actual job.
BTW, FastLane has the part...
Do a search on "headrest" and you should find the thread.