Hi Nick,
My S124 is a late model (registered in Jan 1996) and the wiring loom insulation still looks OK. I have experienced the spaghetti like insulation on some of the early W202 C-class cars and mine is no where as bad, maybe due to youth. The supply to the coils is via two cables, solid black and black with white, which terminate as a two pronged plug mounted on the inlet manifold between runners 1 and 2. A short length of cable connects from a socket on this plug to the coils under the inlet manifold between runners 2 and 3 (for coil 1and 4) and runner 3 and 4 (for coil 2 and 3). All this cabling is flexible and not at all crumbly. Exposure to the air flow has kept things OK. All this points at a bad Ignition control module. I was wondering if any members had opened one of these up and taken any pictures. Replacements seem very pricey and I have experience of repairing electrical devices.