The 3.2L M104 straight-six is widely known to weep oil and coolant at the head gasket, especially at the corner of the head by the timing cover; experienced owners treat it as a when-not-if item. Doing it correctly means pulling the head for machine-shop inspection, as the long-head casting is often found deformed and needs milling, sometimes revealing pitting around the water channels.
M104 head gasket seepage and the '14-bolt long head'
Mercedes-Benz W124 E-Class · mechanical