If it helps...(but apologies if not!

):
I've had a 'mystery' / almost constant airmatic ADS Hard Damping problem on my otherwise immaculate (now 140k mile) 2004 facelift S320L SE cdi ever since I bought it 6 years ago. As if either stuck in Sport 2 or level 4 Driving Safety (full hard) mode at all 4 corners even when in 'Comfort' setting. VERY occasionally and randomly the damping softens-up for a moment (Magic Carpet feeling) - then reverts to full-hard. The difference is night and day if & when it happens.
All this despite 4 new Mercedes OE reman struts, valve block, numerous false negative / 'no faults' (?!) SDS tests by Indies who usually say 'it rides ok' (oh really!

), perfect OE spec Continental tyres at the correct pressures on original 17" alloys, full calibration with Romess gauge, various sensors checked / replaced, new suspension arms & bushes, never any mods to the suspension, the list goes on and on. The ride height is always perfect, never sags or lifts too high etc. But... the damping is far too harsh even at low speeds over normal road bumps & dips around town. Ouch!

And I drive the car gently..
I've nearly 'driven' our kind friends here (dave2302, doni, wallyp, cowboyt, tusabes & others) CRAZY

with updates on my HD saga & further queries about the possible cause(s), but sadly no 'fix' despite their patience & many helpful ideas - thanks to all.
So: I too have considered Coilovers - as a last resort

. But (by my logic at least) having spent £3600 on 4 new struts alone + a couple of thousand £ on other stuff over 6 years there really can't be much else to eliminate. Since the car is almost 'as new' in other respects, I will continue to invest in it as I intend to keep it long-term. Also, a bit more 'digging' into the HD problem time & cost-wise to hopefully restore the legendary Magic Carpet will still be far cheaper than spending, say, £30k+ on a much newer W222 (the only S Class I would consider changing my W220 for).
One (my main) theory & supported by a few others here is that some (I stress 'some') 'mystery' or more routine airmatic problems can be due simply to a poor electrical connection somewhere in the old & delicate electrical circuitry (e.g. corroded / shorted wiring / poor connection to / from a SAM etc) which causes the airmatic / ADS ECU to default to ' Driving Safety' hardest Mode or gives other symptoms but DOESN'T show on SDS or other diagnostic software. Yes it CAN happen according to my local specialist auto electrician who has experience of these things across Mercedes and other marques - and is still on the case with my mystery HD problem. I live in Hope... 🤞
My best conclusion? From experience it seems that many Mercedes Indies here in the UK (forget main dealers!) are either not interested in or don't have the patience / technical skills to do advanced 'digging' / mystery fault finding on a notoriously complex older W220. So they rely on 'no faults' SDS results - even when the real-time driving experience contradicts them. And of course, they are always busy with more routine work on newer cars which is more profitable.
I'm guessing your dilemma around fitting Coilovers or continuing to 'dig' for (existing?) airmatic faults will depend on how much time & cost you're prepared to gamble on either solution. And of course, whether the original airmatic 'Magic Carpet' ride quality (if healthy) suits your driving style compared with Coilovers. Opinions differ around this..
Either way, I'm following this thread with interest and will be happy to share / compare notes as appropriate.