Changing pads in the rear of a 1996 C 36 AMG and the inner dust seal on both sides are shot.. car has 80,000 miles. It looks like I can do this.

#1) rebuild kit at $60.00 ish, PLUS labor to do.
#2) new E 420 caliper at $140.00 each
OR UPGRADE to something that will bolt on and will be better than current E 420 2 piston set up..

Nice if I was to replace if it was in silver already.

Suggestions?

If you upgrade just the rears you will be putting yourself into a ticklish, dangerous situation. This is unless you also upgrade the fronts to match. The car is designed to stop efficiently with the calipers you have and by upgrading the rears only will lock up the rears before the fronts and spin you. You would also have to install an adjustable brake bias to keep this from happening. If the car is only street driven, stay away from larger rear calipers.
For better braking get performance brake pads matched for the front and rear. Best to just rebuild what you have.
Just my two cents....

Tobias MB
190/5.8

PS while clean and rebuilt, spray with silver caliper paint.

I would buy new calipers if I was you Dan. I think that the dust shields are worn out from track braking, they probably got too hot.

__________________
Current Stable:
1994 S500 v140, 210k miles, white with grey.

Former Mercedes in the Stable:
1983 300CD Turbo diesel 515k mi sold (rumor has it, that it has 750k miles on it now)
1984 300CD Turbo Diesel 150 k mi sold
1982 300D Turbo Diesel 225 sold
1987 300D Turbo Diesel 255k mi sold
1988 300 CE AMG Hammer 15k mi sold
1986 "300E" Amg Hammer 88k mi sold (it was really a 200, not even an E (124.020)
1992 500E 156k mi sold
etc.