There's a Mercedes Benz part which works great for that VSV and is less than half the price (Or was in 1998 when I bought mine) Mercedes Benz part number 001-540-86-97 (It's worth looking into.) That's the part that I've installed in my '89. You need to clip the wiring harness from the stock unit. I used butt splice connectors to fashion a jumper to the MB part, or you can buy the MB connectors 008-545-11-28 and 008-545-08-28 -- I didn't. The only disadvantage is that the MB part doesn't mount to the factory location, it has a 2 bolt flange which I zip-tied to the factory VSV mount.
This is, of course only if it's the VSV that is at fault. I don't think that it is, since the valve opens. Typically when the VSV fails, you get no heat at all. TEST THE VSV BEFORE YOU BUY A REPLACEMENT!
I'd definitely check if it's the heater valve. It really should close when temp is at min setting. While I know that the VSV does indeed fail, this doesn't sound like it to me.
Yes, the heat selector should direct air away from the heater core, but if your AC blows cold at all, it's probably working. This is also definitely worth checking.