I get about 21 mpg around town with my 97 E320, though it has a different, less efficient engine than yours (M104). I have yet to take it on a highway-only trip, but I venture to say it would be in the high 20s.

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08 W251 R350
97 W210 E320
91 W124 300E
86 W126 560SEL
85 W126 380SE Silver
85 W126 380SE Cranberry
79 W123 250
78 W123 280E
75 W114 280