I did a bit of research on the problem. It appears that the electronics that drive the needles are not properly detecting that the needle has stalled against the pin. VDO has a few patents covering their version of stall detection. I'll have to take apart a cluster to determine which stall detection design is used and what might be wrong.

Anyone have a dead cluster for a 1998-1999 W210 they want to donate to the cause? I'll pay shipping.