1) I've done this job on my W126 raised on jack stands using the FSM writeup for procedure #33-600.
http://www.startekinfo.com/StarTek/outside/12253/program/Chassis/33-600.pdf
You can do this job without compressing the spring and without using a puller.
2) The lower control arm gets in the way when you try to remove (or install) the 'dogbone'. But you can simply push it forward about an inch to get it out of the way (if you have a helper).
Some have used a come along winch with a strap to pull the lower control arm forward.
I've just used the OEM Bilstein jack wedged in horizontally into the wheel well to slowly move the lower control arm forward. It can't be too high up in the wheel well otherwise you can't turn the crank. I placed a piece of wood between the jack and wheel well to protect the undercoating.
Remember, safety first. Use wheel chocks, place your spare tire under the frame to support the car in case the jack stand fails, have someone within earshot, and wear safety glasses. Spraying the fasteners beforehand with thread penetrant (PB Blaster, etc.) makes for an easier job.
Good luck in tackling this job.