An engine oil leak may develop from the oil level sensor. Replacement of the leaking sensor will commonly correct this concern.
Car Problem Reports
Mercedes-Benz E320 Oil Leaking From Oil Level Sensor
Mercedes-Benz E320 Problem
Engine Affected: Gasoline
Average Mileage: 84,000 mi (50,000 mi - 130,000 mi)
Visitor, 2001 Mercedes-Benz E320, 130,000 mi
Oil level sensor develops a leak on my E320, 2001
no oil leak but a "OIL SENSOR FAILURE" light on dash. $120 part, must remove lower oil pan and reseal with MB sealant.