Your description sounded just like mine did before my work during the holidays. Even the smalles pothole or speed bump rattled the car and sounded like it was at the wheels. I did the bounce on the fender test and the shocks felt fine.

However as my car had almost 150,000 miles and with the suggestions of members on this site I replaced all four shocks/struts. Out of the car - the shocks had almost no compression - so much for the test noted above. It took me most of a day (this was my first job on the 300E) but what a difference it made. If you do it yourself - spray the bolts a day before to make the removal reasier.

I have since replaced the brakes and am about finished with replacing the rear suspension parts (need a tool for the rear tie rods). But the shocks alone made a big difference - the rest is to bring the suspemsion back as i am giving the car to my daughter in another year.