That sounds like BS, like they got you over a barrel and ripping you off..
I have bought a few at the dealer. You do have to have your personal info, like the title, drivers license etc... I have read you need to take the car in so they
can verify with their own eyeballs the Vin# etc...
Seems like I paid around $60 for a tumbler and one key. An extra key Was $17.
The keys are made some where in Texas as I remember.
Do you have the part# for the Tumbler? If so put it into this search. it is the dealer in Monterey, Ca. Stahl Motors.
At least you will get an idea of the price. couple of the parts guys know the W123 cars really well. Ya I know yours is a w124.
www.benzpartswholesale.com
The dealer in Plesanton, Ca. charges like $22 for the replacement key heads,

when they sell like for $7.
Some are totally rip offs.
If I had to take one of the MB`s in so they could see it, I would have to haul it on the trailer 50 miles to the Reno Dealer.
Charlie