This happens to me just recently. I have this 88 420 SEL, and the alarm goes off while driving. I mean, ..the horn was activated and the lights were flashing. I was pulled over by the CHP, ..they think that I have some kind of emergency or that I stole the car...?? As per MB DOC, there could be something wrong with the micro-switch at the door handle or the ECU for this alarm is defective.
I did tried using my MASTER KEY, ...I stick it at the keyhole for 30 minutes, ...I let the computer read it. So far, ...so good. No more horn and lights that flashes.
I hope this could be of help to you.