Well, I don't have detailed instructions (yet), but I can tell you how
to remove the instrument cluster. You pull it out. Seriously, its just
held in by friction. To help me with this I made two "pullers" out of
wire coat hanger with a short (1/2") hook on the end, and a handle
fashioned about 3" away. (I read about the tool and technique here
http://articles.mbz.org/instrument/renew/ ). Slide one in each side at
about the 80C mark on the Temp gauge, and the 60 mark on the Tach (for
my cluster), then rotate the tool so that the hooks catch the sides of
the instrument cluster. Then pull, it comes out easier than you
think.
Once you get it pulled out then you need to remove everything off of
the back. For mine, I found that the seat belt and glow plug lights
came out the easiest, then the clock 12V line (spade connector), then
the speedometer nut and line. Once you get those off you have a good
bit more room, and there are a couple electrical connections for the
tach and cruise (or something on top of the speedometer). The hardest
part is disconnecting the oil pressure line in that tight space. Its a
10mm (I think) open end and unscrew it from the brass housing on the
back of the cluster. One large connector (for dash lights, fuel, and
temp, and other warning lights) and you're done.
Once the instrument cluster is out of the way, then you will probably
have some insulation to move to be able to get down to the switch from
the top.
Disclaimer: I don't know if it would be easier to get to the switch
from the bottom by removing the lower kick panels or not, but for me
its not.

Unfortunately, thats the most help I can offer. I haven't had the bad
luck of my key not turning yet, but it may start soon. Quick question
though... Did you rekey the tumblers to match your existing key? Or
use your buddy's key for the tumbler you borrowed?
If the former, could it just be a really worn key?
Along those lines, who cuts keys for these things (other than a MB
dealership)?

Ok, more questions than answers, sorry about that, but maybe we can
learn together.

I had an '89 260E whose got stuck in the ignition.  Had to leave it
where it was parked for 2 days until I could find a shop that would
take a look.  It was the tumbler, and it had to be ordered from TN
after I verified my ownership with the local MBZ dealer.

You are better off by chaniging out the entire ignition lock. I did that in
mine... I started out with a tumbler... then I find my ignition switch kinda
doesn't work... and realized the pin key broke off on the ignition lock and
then changed the whole damn thing.

Put a new tumbler in though...

(Snip)

Mine had been getting progressively worse but always came up with that
one last turn. Until it didn't. At 9 AM. On the busiest narrow street in
Manhattan where we blocked one lane of three and soon attracted the
attentions of the Law. Called a tow truck and had the car deposited
with an MB garage on the Upper East Side. Cost some $400. But I no
longer worry about not being able to turn the key. Moral: if the
ignition starts to get flakey, don't wait. Fix it. Or better, have a
mechanic fix it.