Yup. A buddy of mine, an excellent Indie Mercedes tech, refers to this as "fire-hosing". I went through all you did on my '85 500 SEL. Same results as yours. Mine was only one cylinder but the same "no-crank" situation. My car would actually run if I pulled the offending cylinder's spark plug.

I pissed about with it for a couple of weeks before I called it quits. Either get the distributor rebuilt, try a known good, used unit or bite the bullet and get a rebuilt distributor (ouch!).

I'm actually going the Megasquirt conversion route using Ford 19lb. injectors but that's 'cause I'm not smart enough to leave "well enough" alone.