I too had an issue with the A/C on my '98 E320. Couldn't seem to get the car cool. Seemed like the fan was shuuting down too early or the thermostat was about 10 degrees off. I took it in to the shop and I found out what the problem was.
I do not like the A/C air blowing on me nor do I like drafts. As a result, I usually have the A/C vents pointed at the ceiling. I've always done this in all the cars I've owned. Unfortunately, in that model car, the thermostat was located in the same panel that held the sunroof controls (namely the panel on the ceiling immediately behind the rear view mirror). As it turns out, the A/C vents were pointed straight at the thermostat reducing the blower speed prematurely.
My trusty mechanic simply redirected the air flow down a little, away from the thermostat, and walla, the car started to get cool.
While I do not know where the thermostat is on your model car (the vents might not even point up that high) you might want to check, just in case.
My experience has been that MB thermostats are indeed the best in the business next to the units put into Japanese cars (much quieter fans) IMHO....
Best of luck.
300SD ('81), 190E ('89), 420SEL ('86?), Jaguar XJ6 VDP ('96), E320 ('95), Jaguar XJ6 ('97), E320 [S210] 4matic wagon ('98), Nissan Maxima SE ('02), DeVille ('93), BMW 325 ('03), LS430 Ultra ('01), Avalon Limited ('05), S430 ('06), MINI Cooper ('05), Toyota Camry ('07), Hyundai Azera Limited ('07), E350 ('06), LS430 ('05)
Nissan Versa ('08), S430 ('03)