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It is my understanding after reading several sources that many 96 and 97 E300 had surging problems. These problems were apparantly resolved in the 98 and 99 model year. I have a 99 E300 with 28K miles and have not had any surging problems to date. You might try using the search function here to get more info. Good luck working with your dealer.
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99 E300 133K 
98 ML320 99K 
87 Saab 900 Turbo Conv 123K 
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