I am not a mechanic and have no idea what your problem is, but it appears your car is going into "limp home" mode.
You might find something in the archives.
Here are the results of a search for "limp home":
2001 E430, Bourdeaux Red, Oyster interior.
1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".