Is the main engine fan with the viscous clutch working properly? At high temps, this sucker should be fully locked up (not spinning freely after you turn off the HOT car).

I had a problem with high temps in my 1995 E420, and one culprit was a burned out low-speed aux. fan resistor. You'll find it behind the driver's side headlight assembly, down low. It's a rectangular metal piece with a coiled resistor inside. Mine was burned out and required replacement.

I'm not certain, but I think these engines aren't prone to bubbles in the cooling system.

Check the main fan and aux. fan operation and let us know.

Troy
1995 E420 95k