Your Mercedes Benz appears to be running rich, causing high CO and high HC. The diagnosis should lean towards a rich misfire. A fuel "feedback" test must be completed in order to ensure proper air/fuel ratio.
In this specific case it is our assumption that your Mercedes is producing high HC because of a rich fuel mixture. This is indicated to us due to the high CO results your Mercedes produced. A smog check station needs to ensuring the oxygen sensor is working properly, your vehicle's ECU is receiving the signals from the oxygen sensor, the computer is computing the data properly and sending the correct signals to the fuel injectors to either increase or decrease fuel delivery to the combustion chambers.
The additional sensors which the smog station should be inspected for proper operation, and which also play a significant role in determining air/fuel ratio, are the Engine Coolant Temperature (ECT) sensor and the Mass Air Flow (MAF) sensor. If the coolant temperature sensor is not operating properly (not sending the correct voltage signal to the Engine Control Module) the ECM will not be able to properly calculate how much fuel to deliver to the combustion chambers. When the engine is cold the ECM is programmed to deliver a richer fuel mixture (more fuel). As the engine warms up, the ECM will lean out the mixture. Insuring the ECT is sending the correct voltage to the ECM is important for correct air/fuel ratio (optimum is 14:7).
The MAF sensor measures the amount of air entering the intake manifold. This sensor must send accurate information to the ECM as well, in order for the ECM to calculate exactly how much fuel to add to the air entering the combustion chambers.
At the end of this diagnosis it will be know whether your Mercedes Benz's high CO fault is electronic or mechanical. The smog technician can then further diagnose the fault. If the fault is determined to be mechanical, the locations which need to be inspected are any and all points of "fuel entry"... such as, and most predominantly, the fuel injectors. It is not uncommon to a stuck "open" or "sticking" fuel injector to cause high CO.
In this specific case since you have applied for CAP repairs, once approved, the State will pay for the diagnosis and repair of your car's smog check problem, up to $500.00. If the repairs cost more than $500.00 and you can afford to pay the remainder you can apply for a one time two year smog check exemption through the Smog Check Referee's Office.