Yes, this happened to me on a 220D. It ran real good and would start when hot, but it wouldn't start cold unless the block heater was on for hours. I could roll start it cold because it was a manual transmission. If I was where an electrical outlet was not available, I had to park on a hill or parking ramp. I had another engine so I installed that instead of overhauling the original engine.

I don't know how much the cylinder walls of you engine are worn. You will have to measure them to determine if they are within spec. I think you have a sleeved engine so you can replace the sleeves if necessary and used the same pistons which are very expensive.. You should check the ring groves in the pistons. Usually the top ring groove is worn. The pistons can be rebuilt by a competent auto machine shop by installing a steel spacer in the groves.

If you don't replace the sleeves, remove the ridge and rough up the walls with a glaze buster or cylinder hone.

P E H