If your lock set up is the same as mine (and make sure it is) then you'll want to see this:

http://www.peachparts.com/shopforum/tech-help/200554-1987-300e-key-stuck-ignition-post1640662.html#post1640662

ignition switch won't turn
 

1994 e320 Tried to turn the key for a week as I read the bad things that happen if you can't turn it to position '1' to use the 'u' shaped tool (thin coat hanger works best - see other posts on how to bend it) with no luck. In desperation lowered the lower dash cover (easy) and smacked the column lock a few light hammer blows, the key turned, removed the cylinder (which fell apart in my hand) and ordered a coded cylinder with my VIN from MB dealer which cost about 50. and took only 2 days, installed and all is well.

you may have provided a breakthrough with your hammer trick. this is the first i have heard of that.

i have been fortunate 3x with different 124's... we have been able to get the key turned and then used a coathanger. 2 of the 3 times the lock just fell apart upon removal...just as you described.

Congratulations. I always keep a spare ignition lock and key set in the parts box. It's save me twice.