1986 560 sel

On a trip this past weekend, I was floating along @ 120km/hr with the cruise on when i encountered the problem. My observations were as follows:

Son had been adjusting the rear seat
A/C began to lose cool
Speed began to slowly drop (120 to 105)
Revs climbed higher (slow rise to ~ 3500rpm)
Economy guage was nailed to the right.

I took it off cruise and the tranny shifted dropping the revs back to normal (near 2000 for just over 100 kph)
Economy guage was still showing full to the right as I feathered the pedal to keep speed to the nearest exit.
Pulled into a gas station and shifted into park.
Idle was fine, revved with no probs
Checked tranny fluid - okay.
Shut down to check oil - that was okay.
Went to start up again and the starter kept turning even when i pulled the key out of the ignition.... I had to lift the terminal off the battery to kill it.

Towed to shop... (Canadian Tire of all places)