I replaced my head gasket on my 97 E320 a few months ago. Like you, I had trouble getting the old gasket off. I ended up carefully scraping it off with a paint scraper, and then with a razor blade (with a handle - like the one used to scrape off your inspection sticker). I also sanded the top of the block with fine sandpaper. I was worried about small metal and sand particles in the cylinders, so I stuffed them with rags before I started, and blew them out with an air hose after I finished.

You could also try some gasket remover. I tried it, but didn't have much luck.

So far, no oil leaks.