You are correct about the EGR causing a lean condition ( as far as the O2 and ECU is concerned ).
The next piece of the puzzle is, if the EGR is acting up, the HC would normally go quite high. A reading of 120 ppm seems rather low, although it was not specified if that number is at idle or high rpm.
I guess there is nothing like " being there ".
2007 C 230 Sport.