Jesse, I'm toying around with the same idea. However, the important thing to note is that the w124 already comes stock with a cold-air-intake, so as noted above, improved performance is likely impossible.
All you can do is unrestrict it a bit by changing the airbox and make it a colder air intake (as I did) by insulating it with some high R-Factor insulation wrap. Another alternative is to use partitions to partition it off from the rest of the bay.
I'm going to work this summer on making a "track-kit" intake that will bypass the stock airbox and bolt straight to the throttle body. Reason? I want to hear the intake noise.
Go ahead & experiment