The top of the hose is in plain view on the drivers side. It passes through a rubber grommet in the firewall. Follow it down to the back of the engine.
I just replaced mine last week. It is readily accessible without removing anything. Here is a link to heater hoses at AllPartsExpress above. The one you need is the Elaplast at top:
http://www.allpartsexpress.com/ShopByVehicle.epc?q=1995-MERCEDES--BENZ-E3--0--/l6_3.--l-Cooling--Components&yearid=1995&makeid=MERCEDES+BENZ&engineid=1195578%40%40E320+%2FL6%5F3%2E2L%40%40E320&catid=Cooling+Components&subcatid=Heater%20Hose&mode=PA
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2008 E350 4matic / Black/Anthracite
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Gone but not Forgotten:
2001 E430 4matic, 206,xxx miles, Black/Charcoal
1995 E320, 252,xxx miles, Black/Grey
1989 260E, 223,00 miles, Black/Black
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