The handbrake linings on my 1992 190E drag on the inside of the disc, like they can't retract properly. If I pull the handle with the car rolling slowly, it will slow the car down but not lock the wheels. It holds the car on hills, but cannot really stop the car once it's moving. I adjusted the mechanism just like described in the Hanes manual: expand the adjusters until the wheel locks, then back off 5-6 teeth. They seem to be too tight because even with the handle completely down they don't retract. But on the other hand, they are too loose because they don't lock up. Everything is new on that system: cables (except the front one), linings, springs, discs... All the expanders, adjusters and linkages have been thoroughly cleaned, painted and lubricated and they all operate very smoothly. It's just like the cables don't have enough travel.

Can someone explain how to adjust properly?

The parking brake generally isn't capable of locking the wheels, it is too small.

There is such a thing as burnishing the parking brake linings. This is where the parking brake is lightly applied then released while driving over a period of time to wear the linings in. As with regular brakes, new linings don't work as well as linings that have been in use for a little while. This could offer better holding power but still, the parking brake is pretty small.

OK. Good to know. Forgot to mention: the linings are not new. Recent but not new. Discs are brand new. But still, they need to be burnished too

How many clicks when you lift the handle? I think the FSM specifies just two.

More like 6-7... How is 2 possible? That would never release the shoes! My problem is more that the shoes continually drag than the fact the handbrake doesn't lock up

The shoes shouldn't drag, your star wheels are adjusted too tightly. You need to back them off to the point where the wheel can just turn freely, don't worry about counting turns. Then you need to tighten the cable at the compensator (under the center of the car). So three adjustments altogether: one adjustment at each wheel, one in the center. If it still doesn't work, then at least one of your wheel cables is frozen.

The hand brake is not set right .All the sdjustment wants taking off the cables under the car .They might not be pulling up equal , due to the pivots points in need of grease .Something rusted up on the cable When the cable works as it should then adjust the shoes at the brake drum.

I fixed it: it wasn't the handbrake beign out of adjustment, it was the backing plates hitting the rotors. I rebuilt the whole rear end of the car last winter and I think I bent the backing plates while trying to strip them or something. Nothing a hammer couldn't fix!