Something's awry-I'm shocked a dealer would offer such a suggestion. What a fool (nothing against the ML, but clearly this knucklehead is profit-driven). Your car's no tire-smoker, but it's got adequate power. Or should.
There's no "chip" out there for your M103 motor. Sorry.
Get a second opinion-something's sapping your power and your dealer has proven he's not up to the task. Good Luck
And Yes, your 4matic light should come on for several seconds when you turn on the ignition