The title of this thread caught my eye and I thought I would chime in. I just finished restoring a 1980 280SE and went the "do-it-yourself" carpet route.

I bought the carpet from http://www.automotiveinteriors.com/carpet/ydg/material_without_carpet.htm
I bought 3.5 yards (remember the W116 is much larger than a W107) and that was plenty to do everything in the car. I sewed vinyl edging using a normal sewing machine where the original carpet had it.

Before and after pictures are here:
http://www.pokrefke.net/280SE/BeforeAfter.htm

I was quite pleased with my work and will be doing the carpet myself on future restoration projects.