If the supporting joint (also called wheel carrier bushing) on the rear axle carrier is shot, then it starts to squeak.

It is located where the rear lower control arm connects to the axle carrier and is basically a ball joint.

To suppress the noise temproarily, spray a little WD 40 into the joint.

If you have the Mercedes Manual on CD, then refer to file 35-116.pdf in the chassis folder for instructions to replace it. Also, a search on this forum will yield pointers on replacing it.

Here is the link to the part in Fastlane : http://catalog.eautopartscatalog.com/mercedesshop/sophio/quote.jsp?clientid=catalog.mercedesshop&cookieid=1TP0T5P4X1UJ0U5VAH&baseurl=http://catalog.peachparts.com/&partner=mercedesshop&year=1988&product=L2030-40235&application=000331025

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1986 300E (3/2002) Rear ended and totaled (10/2009)
2000 Xterra (5/2000)
1992 400E (11/2009) -Sold
1986 300E (12/2009) - Sold
2004 E500 Wagon (6/2013) - Sold