Problem solved. I went ahead and disassembled the roof according to the mpeg I saw. It wasn't all that hard. (I'll go mad trying to find the link to the mpeg again. I would not recommend trying it without knowing the right way to do it.) Ray Nonnie was right. The cables were pushing their way out of the covers.

I disassembled it, wiped everything clean, lubricated moving parts, and reassembled it. Works great now. I think what made the difference was synchronizing the cables and lubricating things.

I asked the parts guy at my local MB dealership about the revised cable covers, and he stated that the change was for cost reduction, and not an improved design. The two holes allows the one part to be used on both sides. That way they only have to manufacture and stock one part instead of two. They only intend on using one of the holes from what I understand.

Ray, you may want to share your "enhancement" with the MB engineers.

Thanks for the help.

__________________
1998 E320 120K mi
1991 Miata 80K mi
2001 Ranger 109K mi

Once you've made the parts different for left and right, it's a cost increase to unify them this way. Depending on the tool, the absolute minimum is a few grand to put a punch in the die for the extra hole. Then to start adding an additional two screws per car is another several cents per vehicle. If they made the change afterwards, for Service Parts reasons only, they may have gotten one less part number, but the real savings with that versus the tooling change was nil. I suspect it was for exactly this technical issue that they made the change.

Here is the video: http://w210.pietrzyk.net/disassembly_77glasspanel.htm

And you don't need to buy the 2-screw part, just add your own screw.

Just drill through the plastic part about an inch away, but no so big the threads won't grab.

Lube the cable with some PTFE lube a couple inches at a time as you close the sunroof, then cover it up and you're good to go.