If the rubber bushings at each end of the shock aren't a loose fit, and the shock moves with high resistance in either direction then it's probably in serviceable condition. The shock really only comes into play when the engine is changing speed quickly.
The noise you're hearing may be a bad bearing on one of the idler or tensioner pulleys.
I recently replaced the idler pulley/bearing on my 86 300E. The bearing just started making a noise like you describe one Saturday morning out of the blue. The noise doesn't really go away above idle usually, it just gets masked by the engine and fan noise at anything above an idle.
You can track it down with a mechanic's stethoscope (Sears makes a good one for about $17), or by removing the belt and turning each of the free-wheeling pulleys by hand. The one with the bad bearing will be noticeably "notchy" and even difficult to turn.
On the 300E you can replace the idler and tensioner pulley wheels individually. The pulley comes with the bearing. I'm reasonably sure the idler and tensioner pulleys are the same as used on the 190E.
Hope this helps