A dislodged valve seat can cause similar symptoms.

Check out this thread for information; "Exhaust valve for #4 cylinder sticks open about a 1/4 inch in 1987 MB 560 SEL".

Links to thread-- http://www.peachparts.com/shopforum/showthread.php?t=208049 AND http://www.benzworld.org/forums/w126-s-se-sec-sel-sd-sdl-class/1352311-exhaust-valve-4-cylinder-sticks-open-about-1-4-inch-1987-mb-560-sel-engine.html