I had the same head gasket problem at 75K miles of my '96 E320... , MB quality at its best, right???. My 200K 1987 Camry has been flawless , NOT a single day in service due to any kind of problems,,, just regular maintenance (change spark plugs and oil by myself, timing belt change at every 75K miles by my master mechanic etc...)

My MB indy charged me $1800 for head gasket job , refilled with 0W-40 syns oil (he said that the head surface was still super flat so there was no need to planarize it)... While U have its head open , you may as well replace the water pump if you have not done so.

Since my Camry is still going strong, my wife told me to "Buy anything as long as it's Toyota" , so I just bought her a new '07 6-cyl 4x4 RAV4, so far so very good

Don't get me wrong, I like driving my '96 E320 MB,,, but my next car is probably a Lexus... but I may not have that chance since I challenge myself to keep my current MB to 250+K miles... unless it nickles and dimes me to death before that... That means I will keep my '96 for the next 17 yrs because I drive only 10K a yr (I have '87 Camry, '94 Mercury Villager Van -wife's car- and new '07 RAV4)