I think you need a second opinion from a good independent. Have your tried Eddie Lai (sp?) at Performances in Vancourver, B.C. ?

It's funny that you have exhaust, and brake issues, because a friend just called and his wife brought their C240 to the "stealership" and they said the same thing (cracked exhaust, big $$$, and big $$$ for a brake job).

Best of luck,
:-) neil
1988 360TE AMG
1993 500E