Coolant (MB's own) was just done, as well as radiator and thermostat. I've done a change before on my other car, the 560, but did not have any problems like that.
Drilling 8 holes into a thermostat housing does not sound right?

Sounds a little bit like a shade-tree mechanic's advice than anything else.
Anyone else with any advise on what should be done? Sounds like an air-lock in the system somewhere, but I don't know how to get it resolved.