I am having the same problem with my 97' S320 air flow. I checked my underhood cabin air filter last night. I took it out and ran the system and only got a little better air flow than with the filter in place. On the interior air filter you described in your post, is it readily accessible or do you have to remove the cover of the passenger footwell?

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KCScout
98 S420 My Wife's Baby
97 S320 My road car
83 300D My old road car (love that diesel)
81 300SD Wife's former Baby
81 240D A fun stick shifter
71 220D My first one