Well I got it back from the dealership. Its aligned now. Ride height in the front is a LITTLE lower but stil about 1-1.25 inches higher than my buddy's 560SEL.
A few thoughts:
1 - I'm pretty sure I've got the correct front springs on the car. 126 321 17 04. (Based on the points system in the PDFs)
2 - Im not sure I've got the correct pads on the front. I picked the same that were on before. 23mm / 4 nub. Actually that was all that was available when I selected a 420SEL. I was thinking about going to a 8 mm / 1 nub pad..that might do the trick.
3 - Could the rear springs be too weak causing the back end to sag and pull the front end up? The rear springs are NEW as of 2-3 years ago. They are the correct spring part number for this car as well. I do see that other part websites list a "heavy duty" rear spring which I actually have installed in my 300SD.
What would your next move be?
I know that the driver's side front shock is broken..in a rather odd way/place. Its right in the middle. You can grab the end of the black tube bit and shake it and the rod shakes. It actually sounds like the lower mount is loose but its not. No movement at all.
EDIT:
I was reading the FSM and the color code for pad thickness determination is on the bottom rungs of the factory spring. I found a picture of my original springs:
Clearly RED. Note the caps are on the opposite end. The springs are upside down, you can see this by look at the bottom and seeing how its tapered off.
With 50 points on the car, that points me to the 17 04 spring with the 23 mm pad!
Anyway.. Thoughts?