White smoke and oil in the coolant indicate either a bad head gasket or a cracked head. I'm not an expert on your engine, but I do not believe there is any reason to rebuild the entire engine with only 211K miles. Do you have a good independent MB shop available? Assuming you are willing to spend some money on this car, your first step is to have a MB mechanic remove the head an see what's going on. Was the engine running strong prior to this problem?