A coolant pressure test is usually the best way of determining where your car is leaking coolant from, however unless you're prepared to do the heater core replacement then I wouldn't do the test as pressurizing the cooling system may make the leak worse.
I believe that heater core replacements on the W124's are a 22 to 24 hour job, and not for the inexperienced DIYer. Expect your car to look like this at some point:
If you decide to do it yourself, you may find this thread useful:
http://www.peachparts.com/shopforum/showthread.php?t=121523. There's a lot of other stuff inside there that you may wish to consider replacing (vacuum pods spring to mind) at the same time.
I think mine has developed a leak as I've been to my indy twice this month because of a loss of coolant and it's still slowly leaking out of somewhere. If I attempt this repair myself, it will be my biggest job by far.