Went through this with my '98 ML 320... and I believe it uses the same compressor. The compressor was fine but the clutch pulley bearing was failing. The clutch alone, from M-B, was approx. $800, whereas a new compressor, complete with clutch, was approx. $1100. Got the part number off the pulley bearing but was told by a local bearing supply house that it was not available stateside. Do a search on this if you want the bearing number; I posted here about 2 months ago when looking for the bearing.

Ended up going with a new compressor.