Independents:
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Check the archives for SF Bay Area mechanics.

Also, ask the dealer's part's manager for a recommendation. Usually, they know who works on the "older" cars.

Get at least 2-3 names, and interview them in person.

Read up on the rear SLS suspension and how it works here:

SLS Theory of Operation:
http://www.silcom.com/~neilv/500E/32-0501.pdf

Height Verification:
http://www.silcom.com/~neilv/500E/40-0300.pdf

Adjusting SLS neutral position (read SLS Theory first!):
http://www.silcom.com/~neilv/500E/40-0310.pdf

Then, ask them how the suspension works, and how they would diagnose it not working.

It could be as simple as it being improperly adjusted, or the torsion bar mount is loose.

Based-upon how they answer, and what you know to be true, and the feeling you get from them, you can make a decision.

Do-It-Yourself (DIY):
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Again, IMHO, the only way to really understand IF you can do some of the suspension work is to READ the factory manuals.

I would go on Ebay and purchase the W124 factory manuals on CD-ROM, and read up on it.

After you have read and studied the manual, if it sounds like something you want to tackle SAFELY (no cheap or lack of tools), then you can begin the journey.

However, can you AFFORD the downtime of your wagon ? Do you have tools, resources, and time ?
If not, don't do it.

Case in point:

I've removed and replaced my wagon's diff many times, but not my 500E's.

I read up & studien the procedure, and thought I could do this.

Then I jacked up the 500E (on jack stands), and inspected what exactly I would need to do. ALL steps to completion.

Seeing the potential to disconnect the rear muffler, the rust surrounding it, and knowing it was my wife's car, I promplty backed-away from this and have now budgeted my mechanic to do this instead.

:-) neil
1988 E36T AMG
1993 500E

BTW: I now own the $500+ Klann spring compressor, (4) 3-ton jackstands; (2) 3-ton floor-jacks; 80-gallon air-compressor, and numerous specialized MB tools from Stahlwille and Hazet (most from Samstag Sales).