I had the "massive smoke coming out the vents" situation on my car several years ago which turned out to be the leads to the blower motor had fried, for no apparent reason. The smoke was insulation going up. Very fortunately for me, when I opened up the blower bay later, I was able to resolder leads and I'm still driving with that blower.

Hope you can salvage your car, the 95 E300D is a keeper!

Rgds,
Chris W.
'95 E300D, 402K

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Objects in closer are mirror than they appear.