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Chris:
I hope my personal experience on the subject will provide you and other members some light on your failure.
My first W124 wagon was a 1986 300TE manufactured on April of the same year.
Bought it used imported from Germany in 1990.
Had it serviced at the dealer always.
On January 1996 had the regular oil change service and was notified by the dealer that the rear subframe had developed tiny cracks. The only way to prevent a big failure (exactly like yours) was to replace the subframe, which at the time was about a US$4,500+ job here.
The dealer offered a free x-ray analysis of the subframe and provided with a detailed estimate of the job to be done. The also concluded that with the state of the roads here, the subframe will fail in less than year.
Completely shocked about the news, I began a very detailed search of the subject. And here is what I found:
1/- The rear axle subframe failure was typical of the first four years of production of the W124 T-series (1986-87-88 and 89 model years). Not ALL models will present the problem, but many did.
2/- Depending on use, loads and climate, the subframes will fail from three to six years.
3/- Mercedes-Benz was well aware of the problem (appears that it evolved from a bad manufacturing process of the materials on the part).
4/- After several formal complaints, Mercedes-Benz AG decided to provide a free subframe replacament (parts and labor) on all wagons (and some sedans too) from date of manufacture up to ten (10) years of age, regardless of how many owners, mileage or countries the vehicle have pass through.
I did do a very detailed compilation of information and went back to the dealer. My wagon being manufactured on April 1986 had ONLY three months left for the warranty work to be perfomed.
Although the dealer did not mentioned ANYTHING about the warranty issue at first, when I presented all the documentation they just took the car and perfomed the complete rear axle subframe replacement, no questions asked. I ended up paying cero, but only because I did all the research.
The work is kind of major (as I over saw it every day): all suspension parts have to be removed, rear cargo floor area has to be removed, many electrical and most hydraulic lines have to be removed for the job to be perfomed.
So, the matter is well documented and vastly known by Mercedes-Benz AG. Although, I doubt the warranty work for the rear axle subframe did apply to American sold models, as the MBUSA treats this problems separate from Germany and worldwide complaints.
Anyway, by now all W124-Ts will be out of the warranty span of 10 years. Don't feel your problem is unique. On the contrary, it used to be quite common and well documented.
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A. Rosich
CL 500, 1998 
S 500 L, 1998 
E 320 T, 1995  [Sadly sold  ]
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