Looking to replace rear wheel bearings on 1989 560sl. Can I do without special tools?

No.

The best answer is sort-of not really.

I believe that on the 126 the hub nut requires a special tool to pull. This has been DIY fashioned:

Something like this:

http://www.4x4abc.com/G-Class/img/nut.jpeg

Also - I don't believe you can pull the bearing without special tools. What you can do is remove the entire hub, then take it to a machine shop to have the old bearing pressed out and the new one pressed in.

See this:

http://www.peachparts.com/Wikka/W124RearWheelBearing

For what I did on my w124

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