Your dealer is either incompetent or lying.

Or both.

Surging idle on M104 engines is very common. All MB techs have surely seen dozens and dozens of cars with this problem.

Further, the Check Engine Light only illuminates when smog related faults are triggered.

The diagnostic module holds a ton of codes that won't cause the CE light to come on.

There can be three causes of the problem:

1. vacum leak
2. bad throttle actuator
3. bad mass air meter

Make Arthur Daltons code reader and follow his directions in using it. The codes may lead you to the solution.

__________________
Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".