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In the back of my mind, I seem to recall (very vaguely) that there is a black cover that threads onto the ignition switch. I think (boy, this is really going back many years) it was in an early 300E. Anyway, if the cover you have is what I am thinking of, you should be able to spin the black cover off by spinning the cover counter-clockwise. The cover I'm thinking off has threads that mate to the body of the ignition switch.
I'm not sure if this is your problem, and hopefully someone else can chime in, but this is the best I can come up with.
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'96 SL600 (105K) Triple Black - Mein über-Fräulein
'79 240D (292K) Yellow/Saddle - Mein Spielzeug
'01 ML430 (123K) Black/Saddle - Wife's Ride
'94 SL500 (164K) Green/Champagne - Daughter's Dream
'73 450SL - RIP
'86 300E - RIP
'88 420SEL - SOLD
'94 S320 - SOLD
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