I have a 1996 E300D with 100k miles.
Seems like I can't sell it for what I think it's worth. About $4500.
So, I'm thinking I might keep it.
The two things to consider. Snow handling and ground clearance.
I live on a hill that would require straight snow tires to get up and I have to take my kids to school every morning.
It will bottom out when I hit a certain hill too fast.
Also, If I pull out of my driveway straight my lower bumper valence gets pulled off. So I have to take it at an angle every time and even then it scrapes at times.
I think raising it an inch, inch and a half might solve this.

Was thinking that I could do this in three ways:
1. Tire size
2. New Shocks-The ones I have are well broken in, not failing.
3. Shock spacers- Possible? I was thinking some kind of 1/2 inch bushing on top of shock. <--- Is this a terrible idea?

Shocks do not determine ride height. Springs do. M/B used different thickness rubber pads at the top of the coil springs. If you get a flashlight and look at the pad it will have between 1 and 4 tits on it, 1 being the thinnest and 4 the thickest. Depending on what you already have you may be able to select a thicker spring pad and gain a little ride height. Otherwise stiffer springs will get it done. You can go to larger diameter tires but you will have speedo error and a goofy look.

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90 300TE 4-M
Turbo 103, T3/T04E 50 trim
T04B cover .60 AR
Stage 3 turbine .63 AR
A2W I/C, 40 LB/HR
MS2E, 60-2 Direct Coil Control
3" Exh, AEM W/B O2
Underdrive Alt. and P/S Pulleys,
Vented Rear Discs, .034 Booster.
3.07 diffs 1st Gear Start

90 300CE 104.980
Milled & ported head, 10.3:1 compression
197° intake cam w/20° advancer
Tuned CIS ECU
4° ignition advance
PCS TCM2000, built 722.6
600W networked suction fan
Sportline sway bars
V8 rear subframe, Quaife ATB 3.06 diff

Chris, it's possible the original springs are not providing the same ride height as when your E300D was new. You may want to check the ride height, and replace the springs if required. As you mention, starting in 1996 the front bumper valence on the E-Class vehicles is lower than previous models. That improves the vehicle's aerodynamics which improves fuel economy. Better to modify your driveway entrance than to fool with the design ride height of your E300D.

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Fred Hoelzle