An engine oil leak may develop from the oil level sensor. Replacement of the leaking sensor will commonly correct this concern.Google+
Car Problem Reports
Mercedes-Benz E500 Oil Leaking From Oil Level Sensor
Mercedes-Benz E500 Problem
Visitor, 2004 Mercedes-Benz E500, 98,500 mi
I took my 2004 E500 4matic into the shop because it was leaking oil. Note; car does not leak oil when cold, must be warmed up to notice leak. My mechanic diagnosed the problem to a faulty Oil Level Sensor Unit ($100). However, they indicated that the oil pan gasket ($30-$50) must also be replaced and resealed to prevent further leakage. Apparently this is a common problem with E500's... unless, you drive yours like a grandma, then you might be able to avoid doing this repair. Overall, not too spendy for parts, it's the labor that gets ya!! all said and done It costed me %510 after taxes and labor. The price we pay to drive like a BOSS!!