I blew a headgasket and went ahead and pulled both heads and had them checked and sent them out to be milled and get a valve job on both heads. The engine had 160K Miles, should I replace the timing chain also? I talked to a MB service manager and he said there is no recommended mileage to replace the timing chain.

Do these engines have a history of the timing chain jumping like the V8s in the W126s as they wear?

Pretty much the same engine as the older S/SL class.
Same design and they just wear out and stretch.
It's not really the chain that breaks it is the guides and the tensioner that allow for play, etc.
Shouldn't cost that much to replace guides and tensioner - it's kind of one of those "since you're in there anyway" kind of things......
Think of it as one of those "prides of ownership!"