This happened once in y 1997 E320 and I did not understand it. I did not change any battery and it has not happened again. Weird.

You might be right.
I have no other problems so this is really frustrating.

1996 E230
 

Im having same sort of issues with dads E230. Red and Green flash alternatly when trying to start the car.

We only have two keys, both of which are not the original key (they dont have the fob with buttons - just plain old keys) We have never had the original key since the car was brought. The battery was disconected now wont start.

Is there anything we can do without buying a new key?

You are having a completely different issue. The original poster specifically denied alternating lamps.

Alternating red and green lamps means that you have a drive authorization failure (DAS). Try locking and unlocking the car with the door cylinder.

flashing alternating red and green lights on rear view mirror
 

When my 96 E230 did this, the engine would spin over and would not start,
I changed the box of relays (K40) inside the electrical box ( although mine had a K3 sticker on it part No "A 210 540 04 72") in the engine bay, this fixed my problem.

At another time I had flashing red and green (simultaneously) , that was a nearly flat 12v battery under the rear seat, (I replaced the battery, that fixed that problem)