I bought a 1989 300E about 5 years ago and within 4 weeks of purchasing it, the cruise control went out. On a 300E (W124), I understand that this is typical around 100,000 miles (car had 96,000 on it at the time).
The cruise control amplifier was replaced (you can get the part for around $200 if you look around) but I had it done by my local independent shop (trusted, trustworthy and friendly) and paid around $450 for parts & labor.

Personally, I think that a $1600 quote is somebody trying to pull your pants over your eyes in order to get into your wallet.

Take care. Merry Christmas to all!!

__________________
Jay Yambrovich
Scotts Valley, CA.

1993 300 CE Cabriolet (A124) 131K miles
1997 C-280 133K miles

2000 BMW R1100RT 69K miles
1989 300 E 216K miles (sold)