Hi all,
I am struggling to replace the ignition tumbler and switch in my '85 300d. I have read the FSM as well as several posts, and watched some videos but I am still having problems removing the locking collar.

My plan is to remove the lock, switch and tumbler to replace the switch and have the tumbler rebuilt by a locksmith as pre-emptive maintenance. Since the key still works, I want to avoid grinding the locking pin so I might be able to reuse the lock.

I have turned the key one notch counterclockwise, and inserted a paper clip (both with and without the tip filed to an angle). I can insert the clip about half an inch into the hole on the edge of the tumbler easily, then another quarter of an inch with slight resistance, however at no point does the locking clip retract allowing me to twist the bezel off. The bezel will wiggle slightly in relationship to the tumbler, so I dont think it is seized in place. I just cant get it to unlatch.

Does anyone see any flaws with my technique, or have any suggestions? If anyone would be willing to take a close up image of the latching mechanism on a spare tumbler, it would really help me get an idea of what I am doing wrong.
Thanks much!

I'm guessing that the 123 used a mechanism similar to the 201, with which I'm more familiar.

On the 201, there are two holes and you have to insert a U shaped wire which is beveled to a point on both legs. The wire compresses the spring that holds the cylinder in place, but in addition the tips move the levers that hold the anti-theft collar. If yours is similar, then the trick is that you need the right bevel on the wire, and you have to press it forcefully in past the lock cylinder spring. See the photos of my 201 that I've attached.

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Thank you!
Unfortunately, the late model 123 system is slightly different, in that it uses only one release, and seems to be a slightly different design (on yours, the bezel just pulls off after you release the catch, instead of twisting off, right?)

With the paper clip pushed in try to turn the bezel clockwise just slightly and then counter-clockwise to see if you can remove the bezel. There is a spring loaded square shaped pin that holds the bezel in place - fits into a groove on the bezel, that prevents the bezel from being removed without the key). You may also need to turn the key a little more to allow the paper clip to push in further (the end of the paper clip actually inserts into a small hole in the square shaped pin).

Well, that was stupid. I spent another hour or so trying to remove the tumbler, finally gave up and tried to remove the steering lock. Loosened the lock clamp. Like an idiot I turned the key back to off, and the steering lock engaged. Now i cant turn the key. Going to try lifting the front and wiggling the wheel. Is there a specific trick to aligning the lock on the steering column?

The locking pin that locks the steering column must be aligned to fit within the hole on the steering column. The pin is spring loaded and located close to the steering column itself (at the left side of the ignition switch). Were you able to remove the bezel and the tumbler? If yes, you should be able to turn the ignition switch with a screwdriver. If the tumbler and the bezel are still in place you will need to use the paper clip again. Once you get the lock pin aligned with the hole, use a small punch to push the pin in and the entire mechanism will slide/twist out of the steering column. I hope you are working from below the dash and not simply through the instrument cluster opening. You can only access the locking pin from below.

If you can send me your email, I will attempt to email you a step by step procedure used to replace the ignition switch and tumbler.

No, I wasnt able to get the collar and tumbler out. I suspect I will end up grinding that pin out, but I am going to try to get the lock to release again before I try that.

If you decide to dill the pin out you will need a high strength drill bit as the pin is hardened steel. You might want to try again to remove the tumbler with bezel if you can get the key to turn. Were you having problems getting the key to turn before you started this work?

No, the key worked fairly well. Mostly I was trying to pull the assembly for preventative maintenance, and to replace the electronic switch since it is worn out.

A paper clip is probably too thin to press the locking pin in far enough. The service manual says to make a tool with 1.25 mm steel rod. Even with the proper size tool you may have to push the tool outward slightly to fully retract the pin.
Photos show the locking pin. Second photo is with a 1.3 mm drill bit inserted and you can see that it is not even fully retracted. A standard size paper clip only pushes it in half way.
You can fit a rod up to 1.5 mm into the release hole.

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Thanks for the help and pictures!
I was able to unlock the steering lock by gently turning the wheel to the left while applying slight pressure to turn the key. There was a very slight clicking noise when turning the wheel to the left which corresponded with the exact moment that the key could be turned.

I found some music wire at the hardware store that showed very close to 1.5mm based on my analog calipers (can't find my digital ones..) Even with that, which was much more resilient than a paperclip, I can not get the pin to disengage. I might mess with it a bit more, but I'm probably going to break down and take it in to a locksmith.

I was able to remove the steering lock using a short flathead screwdriver, a mirror, and a lot of patience. It was extremely worn out, very little spring pressure compared to the new OE piece I bought. I replaced it using new allen head screws, (4mm x 7 pitch, if memory serves) which were much easier to install. This fixed the problem that was causing my heater to not work unless I wiggled the key after starting the car. (Fan cuts out when you start the car, the spring did not return the ignition switch back to the "Run" mode completely, causing the fan to stay disengaged)

One note to anyone attempting this procedure, the ignition lock I ordered turned out to be a different part number with a slightly different design (on the old one there was a plastic key piece that rotated between the connector's pins, the new one was missing that) The different part seems to work just fine, so don't panic too much when you see that they are not identical.

Whoops! I just realized that you said 1.25 mm, not 1.5. Not sure how I made up that number. I'll try to find something closer to that size and see if I can get it to work.

I was able to insert a 1.5 mm drill bit into the hole but anything larger would not fit.
Remember to try pushing the tool slightly outwards once inserted. This pivoting action will push the pin in fully.

The purpose of the paper clip or wire is to hold the square shaped pin in the down position enabling the black bezel to be removed without the key in the switch (the bezel is impossible to remove with the key inserted in the switch). Once the bezel has been removed re-insert the key and remove the tumbler.

Round the tip of the release tool slightly. There is a ramp in the square lock pin that the tool has to slide on to retract it. You want it to slide and not dig into it.
Key must be in and tumbler turned to position 1 as you did in your first post.