I'm not exactly sure, but I seem to remember a post a while back that described symptoms. Try doing a search for "floating rear end", or something to that effect. If I remember correctly, it was regardinga 300E, and the recommendation was to replace rear thrust bushings (I think).
'73 280SEL 4.5 (9/72)- RIP
Only 8,173 units built from 5/71 thru 11/72
'02 CLK320 Cabriolet - wifey's mid-life crisis
2012 VW Jetta Sportwagon TDI...at least its a diesel
Non illegitemae carborundum.