Thanks for the reply! I should have mentioned that I had the upper timing cover gasket replaced earlier this week. I however was enlightened today by a mechanic with 30+ years MB experience. Here is the story:
Between 1993 and 1997 the E320 with the M104 straight six was produced with a head gasket that was inferior and usually started to leak between 80 to 120K. The normal spot for the oil leak to occur is at thepassenger side of the head at the "C" shaped area where it meets the upper timing cover. It can also start to leak in the passenger side rear corner. Mercedes has a all new gasket design with steel inserts that corrects the old design flaw. I am told it will never leak again once replaced with the new gasket. Sooo. I am rounding up the parts and preparing for a weekend and week of evenings to do the job. I would have been thrilled if it was just the upper timing cover. Btw.. This same gasket was on the 2.8and alsoon theC class from 94-97 and S class from 92-99. Wish me luck with the repair job. I hardly have the wiring harness out of the way and I already miss driving it.