I did a SS red 87 560SL for one of my clients a few weeks ago. It was the first Mercedez he ever bought, so he holds onto it for sentimental reasons.
There are a couple of ways to tackle everything. First do some paint thickness readings, that will help you decide on the best course of action. Second, focus on masking. Heavily oxidized SS paint likes to throw stuff everywhere, no matter what you use, so be prepared. Accurately masking everything will save you a ton of time in the long run, and make your job look that much cleaner.
Depending on your materials, there are two ways to remove the oxidation easily, with a rotary or a DA. Now before people mock the DA in this application, it does have some solid advantages over the rotary. Although it will make the process much slower, the DA is much more resistant to transferring caked polishing material and removed oxidation to the paint of the car. This is a big plus. If you have thin paint, this may be the easiest way to remove the oxidation without doing any serious correction. Your other option would be to just use the wool pad, making sure to spur it as often as possible. This will keep the pad surface clean and it should cut through the oxidation easily with something like Megs #83.
After you take off the oxidation, move onto something like #82 or Speed Glaze, either of these should have sufficient cut to remove any defections with a polishing pad on a rotary. Try the Megs Yellow polishing pad first, if that isn't enough cut move onto an LC Orange. Finish with Megs White and #82 and you should have a really solid finish.
I will post up some pics of the SS job that I did a few weeks ago for reference. I used #83 with a wool pad for oxidation removal and finished with #82. LSP was Souveran.
