My recently-purchased 1994 E500 with ASR defeat will smoke the stock tires when cold (engine temp below 50C or so), but when warm (80-90C), it barely spins the tires at all. I'm trying to diagnose this right now. New plugs and cleaning the cap & rotor made no difference, even though the old plugs were shot.

My guess is premium pump gas isn't good enough, and the computer is retarding the ignition timing, cutting power. I'm going to try NOS Racing Formula octane boost this Friday, and after that try 3 gallons of toluene at my next fillup. More details on the gas/octane thing here:

http://www.idavette.net/hib/fuel/index.htm