I have just about finished with a similar sequence of events with my 1986 190E 2.3-16. I did not have collision on the car and have basically turned it over to my oldest son (it is a few months younger than he is). He was driving and got hit while standing still in a large traffic jam on I-91 outside Hartford, CT on November 14, 2003. Long story short - negotiated with the other guy's insurance company for 4 months and finally got a settlement that did not result in a "salvage" title and had enough money to fix that damage and clean some of the rest of the signs of aging up.

I think you are being exercised unnecessarily by the body shop, as your damage should be repairable without replacing anything in the rear. I was in awe of what a frame straightner will do. You would be hard pressed to find evidence of my son's accident in the trunk, and it used to look like a crushed coke can in there on the main structural rail on the driver's side. The trunk would even shut again just by pulling the rear back out, and the seams on the sides of the trunk were aligned. I replaced the two rear fenders anyway since they had begun the change back to iron oxide.

The front fender may be beyond recovery but I doubt that part, even from MB is much more than two to three hundred dollars. And there are other sources for those parts.

I used genuine MB supplied parts, which I purchased and supplied to the shop. It saved me their mark-up and I was sure of what was going back into the car. You might see if you can do the same. Get a list though, and check more than one shop.

Our car is not perfect as some of the trim is not perfectly aligned, but the vehicle is now truly rust free, it looks like it did when I got it (until you look inside....that is next), and the engine runs like new still.

Be persistent, find a cooperative body shop, get an estimate that does not "force" the insurance company to total the car, and negotiate a settlement that gets the job done. I got a negotiated solution that included extra cash to compensate for loss of vehicle (paid for a new spoiler). Send a registered, return reciept requested letter to them to get them moving, and note you will be asking for loss of use of your vehicle compensation.

I wrote a lot of emails, letters and made many phone calls. If you need to, write to the State Insurance Commissioner. Good luck. Jim

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Own:
1986 Euro 190E 2.3-16 (291,000 miles),
1998 E300D TurboDiesel, 231,000 miles -purchased with 45,000,
1988 300E 5-speed 252,000 miles,
1983 240D 4-speed, purchased w/136,000, now with 222,000 miles.
2009 ML320CDI Bluetec, 89,000 miles

Owned:
1971 220D (250,000 miles plus, sold to father-in-law),
1975 240D (245,000 miles - died of body rot),
1991 350SD (176,560 miles, weakest Benz I have owned),
1999 C230 Sport (45,400 miles),
1982 240D (321,000 miles, put to sleep)