Your symptoms are consistant with needing your Wiring Harness replaced.
The insulation on the wiring starts degrading over time, eventually falling away from the wire completely in some places resulting in false signals. It seems that high heat quickens this process, when this happens the engine electronics start having problems, like what you are going through.

Do a search (upper right button) for "asr limp mode" and you will some good info on this.

This is a common issue on 500E's as the under hood temps are a little higher due to less air circulation space.