Subman- if your W124 400E/E420 has ASR then I am 99% sure a W124 500E's rear diff will work.

If you don't have ASR, then contact Stu Ritter on the Ritter/Easley MB list. He found a 3.07 limited-slip from a 70's 450SLC, and moved the innards to his original 400E's diff case. I believe he had to machine a stator in order to get an ABS sensor. Also, Carl of Bergwerks I believe did a 2.82 non-ASR for a 400E just recently.

:-) neil