I am moving to California (Palo Alto) the second week of January and having my cars shipped is a few days. I was trying to get "everything" repaired on my Mercedes 420 SEL before my move. Well, the low temperature problem I posted about the last few days is fixed (broken new thermostat). the mechanic let the car cool for an hour before changing the thermostat and when he started the car he showed me that the timing chain makes a grinding sound for a second when the car is started. It does not make the sound when it is restarted. I bought the engine about 20,000 miles ago and was told it was rebuilt though there were no receipts. It was very inexpensive and runs great. I never noticed the chain noise at start-up because I live in NYC and park in a garage so the first start of the day is done by the attendant. I also never noticed it when I am inside the car starting it. It is very noticeable (though short) standing in front of the car with the hood open. The mechanic deduced that the bottom end of the car was never rebuilt because the front seal appeared original and was replaced when he installed the new water pump. He does believe that the heads were done pretty recently. I am seeing some blow-by in the air cleaner so I don't know how recently the heads were done.
What are best/worst case scenarios as far as repair (cost). What should my course of action be and does anyone know a good, reasonably priced mechanic in the Palo Alto area. I don't mind driving a bit for service if it is worth it. Also, I might need a repair for my wife's blown gasket when she hears that the car needs more work.

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1988 420 SEL
1991 420 SEL with 560 motor
1993 Miata

Go for the timing chain tensioner first! It shouldn't cost you more than $175 to have it done by an MB qualified mechanic.
It has a spring that applies some tension, but oil pressure also plays a part in bringing the timing chain to the proper tension. So judging by your noise at startup...oil pressure seems to be playing-in as a factor.

If the chain tensioner does not remedy your startup noise, then you probably have a worn or broken guide rail, which would require disassembly and reseal of the timing covers both top and bottom....a much more expensive repair.

Hopefully when the top-end was rebuilt, the tech did a competent inspection of the guide rails, therefore reducing the chances of them being the culprit.

Tensioners are on fast lane for $90+/-...Happy New Year.....and welcome back to CA!

Thanks for your response. If it was just the tensioner I would be a very happy man! I will try to identify a good mechanic when I get to Palo Alto and have the car looked at. Happy Holidays and New Year!

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1988 420 SEL
1991 420 SEL with 560 motor
1993 Miata