Thanks everyone for the replies. Looks like a new radiator will fix the problem.
Is it a DIY job. Doesn't seem to difficult. I live in Kent, WA. Does anyone know of a good shop?

Absolutely a DIY. I did it this morning before coming to work. Doesn’t make sense to pay someone hundreds of extra dollars to do something so straightforward.

This is the DIY for the W124. Yours should not be too different.
http://www.peachparts.com/Wikka/W124Radiator

Enhancements/clarifications to the article based on my experience with the 95 E320:

• For the transmission cooler line bolts use a 19mm wrench. (They are not oil cooler lines as the article states.) You will lose only about 2 tablespoons of trans fluid in the process.
  
  The transmission line bracket at the bottom is secured by a single bolt. The bolt head is flush with the plastic “foot” of the rad so you have to go at the 10mm nut from below. For easiest access, remove just the two front 10mm bolts on the belly pan and drop it. Then you can easily loosen the bracket bolt, as well as the 6mm bolt on the clamp of the lower hose that runs to the expansion tank.

The only things that slowed me down were the fan – specifically, getting it back on since my hands are too big to maneuver easily between it and the radiator to refasten the bolts; and getting the radiator clips back on (i discovered strong, needle nose-type pliers make it much easier.) Eliminate these two obstacles and this is a one-hour job, at most. (But don’t try to convince your local shop of that.)

Finally, the price spread between OEM Behr and aftermarket radiators is too small to waste time bargain hunting. Get the real thing.

__________________
2008 E350 4matic / Black/Anthracite

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Gone but not Forgotten:
2001 E430 4matic, 206,xxx miles, Black/Charcoal
1995 E320, 252,xxx miles, Black/Grey
1989 260E, 223,00 miles, Black/Black