In answer to your questions:
1.) The CD-Rom manual is great for the S class. Worth every penny of the price. It gives great detail about the repairs you describe, and gives the special tools needed to remove the rocker arms, and the head bolts.
2.) There is a danger of the threads pulling when the cam bearing block bolts are removed. This DOES lead to pulling the heads and heli coiling the block. He is telling you the truth there.
3.) The second opinion advice is worth following too. I had valve train noise, and discovered it was only worn rocker arms and not the cam as I was quoted by a local mechanic. I found this only when I pulled the rockers (using the tool I discovered in the CD-Rom manual). Saved me pulling the cam, and getting into the head pulling mess.

My $.02....good luck. It is a good car, and worth spending some money to get it right.