My 300SD had the same problem. Here's what I did:
1. Remove door panel and use power window switch to get arm to a place where you can work on it.
2. Drill out the "mushroomed" rivet and remove any pieces. Remove the old plastic sliding jaw from the track if it's still there.
3. Open the plastic part of the jaw and replace the metal pin that's in there with a bolt of the same size. Try and get a bolt with a phillips head or slotted head so you can hold it with a screwdriver when you tighetn later on.
4. Put the plastic piece in the track where the old one was. You should see the bolt threads sticking out of the plastic piece and facing you.
5. Adjust the window itself and/or the arm to get it lined up with the bolt head. Push the arm over the bolt head and put a nut on it. You will need to devise a system to allow the arm to slide. What I did was put on the following hardware in this order (starting from the "track" side):
Bolt, washer, arm (from window motor), washer, nut, nut. This allows the window arm to swivel between the washers. The two nuts are important and need to be tightened against each other (maybe use locktite?) so they don't unscrew when you use the window motor.
This has worked fine for me with no problems! I used some brake grease to lube the tracks. If you do this, first clean out the tracks really well since there's tons of 15+ year old gunk in there!
Neal Bhatt - email@example.com
'83 300SD 193k