Thanks for the responses everyone. I too thought the price they mentioned was pretty steep and I was a little concerned they do didn't do any testing. It really freaked me out to hear that diagnosis, as the car drives fine. There is no smoke from the tail pipe or anything. I had suspected it might be something like mootor mounts or a small problem developing with the fuel distributor. I don't know if the service guy is trying to work his way into the sales department or not, but he really went out of his way to tell me not to "waste another dime on the car". I was pretty depressed over that and I'm still not thinking objectively about it. One thing is for sure, I'm not ready to give up on it yet. I am going to get a second opinion. I'll let everyone know what turns up.
1995 E420 - retired
1986 420SEL - retired