Excellent summary.

For a 95 S420 you can tap an auxiliary input into the CD changer signal if you have a working CD changer. If you use a switched jack, the CD signal comes through until you plug in the auxiliary player. Then the CD signal is cut and the auxiliary device signal goes through. A Switchcraft 35RAPC4BV4 (http://www.switchcraft.com/products/pdf_files/jack-107d_schematic.pdf) should do the trick.

As mentioned, the auxiliary device runs off its own power and controls.

Sixto
95 S420
87 300SDL