The valve your talking about is part of the climate control servo.
There is an electric motor in the servo that drives a gear assembly
from max heat in one direction to max cooling in the other.  Along the
way, various vacuum and electrical connections are closed or opened to
control the system and the valve is moved from fully open to closed.
The valve is not replaceable as a seperate unit.

If the system is behaving correctly except for heat, ie, moving the
temp to 85 sends air to the footwells with the blower stepping up to
high, moving it to 65 turns on the AC with air coming out the upper
vents as the blower slowly slows down then speeds up again, then the
servo is working.  Unless the valve has somehow become seperated
inside from the rest of the gear train, it has to be opening and
closing.

Is it possible the system is air locked?  I think that's unlikely,
however, according to the service manual, after refilling the cooling
system, it's recommended to manually run the little aux heater pump to
help get air out of the heater system.  That's the small pump that's
located close to the servo.  It's function is to pump water through
the heater core when the car is first started in cold weather to get
heat faster.  I've never bothered doing that and never had a problem,
but it's easy to do.  You just need to disconnect the pump connector
and directly connect it to 12Vs, paying attention to polarity so it
runs in the right direction.  Brown is ground.

As a next step, you could disconnect the hoses to the heater core and
try flushing it with water, to make sure there is free flow.  You
could also try verifying if water makes it through the two paths in
the servo valve.  With the ignition on and the temp set to 85, the
valve should be open.  You could connect a piece of heater hose and
try pouring water in to see if it runs out the other side of the valve
fittings.  Another simple test would be to bypass the hoses around the
valve temporarily, using two short nipples and hose clamps.

If it turns out you need a servo, I recommend getting one from
Performance Analysis in TN.  They have remanufactured ones that
replace the lower plastic housing with an aluminum one.  The plastic
cracking, leaking, and ruining the rest of the unit is one primary
mode of failure.

Ok. the blower works but there's no heat. I suggest you first do a test.
Run it in DEF mode. That simultaneously engages the A/C compressor and
full heat mode (to melt ice and defog the windows). If there's heat in
DEF the servo is probably OK and the logic board is suspect.

There could be one of two basic problems. The logic board or "amplifier"
could have a solder crack or the "servo" could be dead. The amplifier, a
black covered cigarette size pack device with wires connected to its
bottom) is located behind the glove box (remove the GB to get to it).
Its wire connector has nearly to be pried off. This device can be bought
on an exchange rebuilt basis for about $100. In my experience sudden
erratic behavior is a symptom of an "amplifier" malfunction.

When you shut off the engine do you hear the servo run for about five
seconds? (It's returning to its off position.) If so that's good, or at
least better than not, which suggests the servo is dead. The servo can
also be bought on an exchange rebuilt basis for about $500.

Of course there could be other causes - the temperature sensor, the
temperature setting wheel - but these are much less likely to be the
cause than the amplifier or the servo.

Don't bother calling a M-B dealer for these parts for the price will be
as much as you paid for the car!