You definitely have the Gen II style PBU. There is no silver box or external "resistor" or relay box for the fan. All of the electronic "brains" reside in the PBU.

Sometime in mid 1986 the fan fuse was moved to an external fuse holder to prevent melting the fuse and poor connection problems with the 25A fuse in the fuse box. Start your checks there. If you have the old style aluminum fuse, 86 that sucker and install a brass or copper fuse.

Power for the fan is fed from the fuse, straight through the ignition switch to the transistor pack mounted in the fan plenum. The PBU outputs a varying signal to the transistor pack to control fan speed. Pressing the "Defrost" button should force the fan on high, regardless of any other setting in the PBU.

You could have one of many things going on:
1: No power to the PBU (do you hear the aspirator fan motor running?)
2: No power to the ignition switch on the fan circuit (check fuse/box)
3: Bad ignition switch (fan has its own dedicated circuit on the ignition switch)
4: Bad transistor pack
5: Bad fan motor
6: Bad wiring or electronics, though the electronic part of the PBU tends to be fairly robust.

__________________
Current stable:
1995 E320 157K (Nancy)
1983 500SL 125K (SLoL)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)

Gone and wanting to forget:
1985 524TD 167K (TotalDumpster™) [Definitely NOT a Benz]

Thanks for super feedback. When the PBU intermittently works, the fan also works fine in both speeds. I have a suspicion that the problem is in the ign switch area. The switch itself is new but the wiring has been played around with back there by a lesser individual some time in the past...