Date registered: Feb 2008
Vehicle: 2004 W220 (S430) ; 2001 R129 (SL500) Sport
Location: Alabama Gulf Coast--formerly Charlottesville, VA
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Assuming the dealer has checked that the key is the right frequency for the model you own, I'm at a loss. If the dealer can't figure it out, I'm not sure who would be able to. I'm not familiar with programming the keys, but I expect there may be a frequency disconnect between the key and the car--which the dealer should be able to detect. I'm not sure how the dealer can tell the key is receiving the frequency--but he should be able to either change the broadcast frequency of the key or the receiving frequency of the car.
"Don't pick a fight with an old man. If he is too old to fight, he'll just kill you."--John Steinbeck