I had this problem with my 88 190e 2.3L. From what I understand from reading a bunch of posts here and the experience that I had with my car is that the problem could be various:
1) Control Unit bad (as you mentioned)
2) Vacuum elements bad (three located behind dash)
3) Vacuum Centrol Unit (do not know the tech name but the one behind the glove box) could be bad.
4) Something wrong with Vacuum Pressure?
5) One or any permutation of the aforementioned could be bad.
Need to have someone that really knows what they are doing to check this one out. My mechanic diagnosed the whole system as bad including the "Klima" relay. Very costly replace all the elements involved and the relay!!!
It is my understanding that these parts tend to go out after 10-15 years! Also, recomendation, if it is diagnosed that just one of the vacuum elements behind the dash is bad, replace all three. To replace these you need to tear apart the dash and for the aprox cost of part (US$20 each) I recomend that you change all three while you have the dash apart.
In another thread, I read that one guy had this problem and his mechanic only changed two of the three vaccum elements and now it seems that the third one just went bad. I mean if you go through the trouble of tearing apart the dash, meanwhile change all of them!
Now this is my experience that I had with the A/C heater system in my 190e. I do not know if I am leaving anything out.
You can have the same problems with yours but also need to check the Heater Valve. According to Gilly (another post) this is located near the batery and it somewhat buried! And as for teh circ button not working, I think that it could be related to a bad "Klima" relay. At least that is what my mechanic told me and changed the aprt and it works now. I do not know what else he did to make it work. But, as I said to Haasman, have someone who knows what they are doing to check it out.