The 280CE was the lowest production of all of the 123's, and what you have described sounds like a really clean car. Therefore, I would not think that you would do too badly on the bucks. I have seen really clean ones in the 5-7K range and certainly 4K is not unreasonable in the right market. Check out the classifieds in The Star.
Though I know it is frustrating, the amount of money you have spent is not out of line with the value of the car. I hope that you will find your compression problem without major surgery, but you may need to face up to a rebuilt head. If you can do the work yourself, you can probably get away for a grand or so. If that gets you a car you really like that you can drive for 2-3 years, it's not such a bad deal by MB standards.
By way of consolation, I spent just about what you have in your car on my 300E's air conditioning last summer.
Falls Church VA
'66 200, '66 230SL, '96 SL500. Sold: '81 380SL, '86 300E, '72 250C, '95 C220, 3 '84 280SL's '90 420SEL, '72 280SE, '73 280C, '78 280SE, '70 280SL, '77 450SL, '85 380SL, '87 560SL, '85 380SL, '72 350SL, '96 S500 Coupe