I would start with some diagnostics.

Test the O2 sensor your self with a multi meter. You can unplug it under the drivers side carpet. Its a round connector. Connect your positve lead here and negative to ground. You should see a value between about .1 and .9 If you increase the rpm it should change. If no change it could be buggered.

After eliminating this then I would try adjusting the EHA. I had the same issues with a 190e. It was getting to much fuel ( your complaint). From memory I took the EHA off. Theres a screw on the back, remove this and you will see a little nylon allen screw. Turn this half a turn anti clock wise and see if it changes. Remember anti clockwise is less fuel clockwise is more. However fine adjustments are required. Have a play and you may get a setting which suits.

On another note if the EHA leaks it could be dead. There is no need to change a cat converter as it wont cause smoke and poor mileage. I think your dealer is a bit of a bush mechanic. I got taken for a ride when i took my c200 to the mechanic - always get a second opinion.