We're kind of curious why you didn't mention the hesitation to begin with
I think your engine has more in common with the 94/95 E320 engine than with the 300E single overhead cam older one.
http://www.peachparts.com/shopforum/showthread.php?t=155085&highlight=M104
http://www.peachparts.com/shopforum/showthread.php?t=154398&highlight=M104
Also this engine suffers from the infamous wiring harness degradation problem.