Finally swallowed my pride and had my 300E to a local independent Mercedes shop in Macon, GA. Turns out the problem was the adaptor that connects the rotor to the front of the camshaft had broken.
I would have found that out if I had taken the cap fully off and examined the distributor more closely!
I also had them replace the valve stem oil seals as the car has been using a lot of oil. I will be monitoring the consumption to see how much difference this has made.
Had the shop check out the steering shake I had posted earlier. Advised all the suspension components were perfect and that I should have the tires electronically balanced on the car by someone like Butler Tire of Atlanta.
First time in many years I have had someone else work on any of my cars but it was money well spent. Anyone out there in Middle GA looking for a good Mercedes shop should try Bridgeman SilverStar in Macon. They were very courteous and helpful and had my baby back on the road in no time.
Also thanks to everyone who offered advice on previous posts.
Later y'all,
Colin.

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92 Mercedes 300E 2.6
86 Plymouth Conquest TSi
79 Chrysler Cordoba (without Corinthian Leather!)

DRIVE FAST TAKE CHANCES!