Saumil, I also think the starter might be the suspect. I'll give it a closer look over the weekend. Thanx.
Harti

Yuhee,
I found the culprit and punished it.
I took the starter apart. Looked totally okay from the outside. Inside, however, was half a ton of shredded graphite and one copper strut of the collector was broken off. No wonder it didn't work anymore.
I finally ordered a new one for 176.46 with a lifetime warranty.
Thank you to everyone for your great help and support.
If someone is interested in pictures... I simply don't know how to post them. Otherwise ask for HPauls2000@verizon.net.
Harti

Very Good..
..and if you ever have starter circuit problems again, remember that connector next to booster is a great test point to seperate the circuit from the engine bay and the car's cabin..no power there and you know NSS/K38/Ignition sw are suspect. [ upstream problem]

Hi I have a simular model & if I dont start the car in a 20 second time frame from opening the door the alarm system does its job, I then have to press the alarm pad on the key ring again or the security switch hidden under the dash before the car will start. hope this helps ... baz

Hi Baz,
my Merc doesn't have a remote opener. Where is the hidden switch under the dash exactly located?
Harti

There isn't one..he has an add-on alarm system that somene installed with remote keychain transmitter..The car does not come w/remote on your year chassis.

Yours does have Factory ATA [ Alarm system that does have starter lock-out, --unless made for Canada- ], with the K-38 relay I mentioned ..That is a common fail part on your system and it is in series with the NNS for starter circuit. That is why I had you go to the terminal at the firewall..if the starter spun when you brought 12v there , then the problem was most likely the NSS or K38 relay..VERY common" No Starter Crank" faults on that chassis..if you ever have that problem, you can do that 12V. test lamp Tip I mentioned at that same feed wire at the terminal..if it does not light when you turn the key, you then know your problem is not the starter downstream, but upstream from there , meaning NSS , K38 relay, or fuse #5 [which supplies K38 relay.] Anyone of them will cause the condition b/c they are in wired Series, from the ignition sw ,to the NSS, to the K38 relay, and on to the test terminal at firewall.
So , anyone reading this now knows how convienient this terminal is for diagnosing where the problem lies ..upstream/downstream-in cabin/under hood.
Makes it narrow down real fast..a good test to be aware of for the diy guy...
Once you get your starter repaired and back in, if you do the 12v jumper to that same center terminal, you will then see the starter now spins over. The test is no longer needed as you have found the problem, but you now know of it for down the road possible crank problems. And with your chassis ,with age/milage there is going to come the time that one of those common starter circuit parts are going to fail..they are mechaincal switches and they just wear out from use/age..

Thanx Arthur,
always a reliable source in plain english.
Harti