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And the culprint was the ....
Position Sender Unit
This is some sort of sensor wire connected to the ignition control unit, and which evidently controls ignition timing (??) .
The insulation was gone and the metal braided wire core was exposed, shorting out due to moisture and heat.
Still plan to replace distributor, plugs and wires for good measure.
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2008 E350 4matic / Black/Anthracite
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Gone but not Forgotten:
2001 E430 4matic, 206,xxx miles, Black/Charcoal
1995 E320, 252,xxx miles, Black/Grey
1989 260E, 223,00 miles, Black/Black
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