I got the old part back, the plastic part that pushs to unlock and pulls to lock was broken. how could MB make such a bad design. Should have used metal or something more durable. The whole mechanism only costs $80 but I was charged 2 hours of labour. If I knew it was that easy, I would have bought the part and did it myself. Ouch, it hurts. The dealer just replaced my rear brakes not so long ago, cost me a lot of $$$.
Anyhow, the faulty locking mechanism never set of the alarm though, it seems the tailgate is shut pretty good even though it didn't lock. It only triggers the alarm if somebody opens it.
Oh, while I am at the tailgate, the opening around the door handle started rusting. It was a problem and I had MB sandblasted the area and repainted and clearcoated. It starts rusting again. This is no good.