I just got my car (1993 190e) back from the MB dealer service for the same issue. They said it is quite common for the screw holding the rotor to loosen. The rotor then grabs a contact in the dist cap and breaks the screw completely off. A drill retap and new rotor holding bracket is required. Sorry I can't advise more on the DIY aspects as I naturally didn't watch. The repair took them 2 weeks as the bracket had to be scrounged from the MB parts system.
The cause in my case and likely yours too, was neglect (150k mi w/o a tuneup). If the rotor and cap are changed periodically, the catastrophic failure is unlikely. With a radiator hose, my cost was $650. I'm glad to get the old girl back, 'cause she drives better for me than most newer (inc MB) cars.