Dear Spiderman and Gilly:
Thank-you very much for your help and replies. I will try to answer some of your questions and more fully describe my oil usage problem. I hope that you will be able to tell me whether its the head gasket, the valve stem seals or that my oil usage is normal.
Yes the car is a beauty, with a perfect interior and exterior (I bought it from the owner of an autobody shop, and know some of the guys who work for him). And I forgot to mention, I had the A/C compressor, suction hose, expansion valve and receiver dryer replaced (about $2,800 using parts from fast lane). A mechanic ex-friend of mine blew the system up when converting to 134a without knowing that 134a is under one third more pressure than freon. So when he filled the system to the pressure recommended for freon the system blew. The only other unecessary money I blew on the car was the custom installation of my MBQuart/Alpine head & CD Changer system -- the sound system is amazing.
In any case, re: the A/C problem, what I will do is purchase a new or rebuilt (haven't decided which yet) pushbutton controler unit and install it. I would appreciate any help on removing the old one and installing the new. I don't think my a/c problem is vacum or valve related -- the right vents work when directed to -- the only problem is heated air coming out of the side vents when is should be a/c.
Re: oil usage. I drive the 87 300E really hard, only use synthetic (15W50 Mobile One now) and go through about 1 quart for every 2,000 miles I drive when using 10W30 synthetic. Reading the posts this seems to be normal usage. Is it? Also, with synthetic can one safely go 5,000 to 7,000 between changes?
My mechanic saw something that looked like oil in the expansion tank -- but nobody was sure where this came from. The previous owner or some previous mechanic may have put a leak sealer in there. In any case the mechanic did a "blow-by" test and said that the results were negative (i.e.: no oil leaking into coolant). The plugs looked fine, and no bluish smoke was seen coming from the exhaust. We then concluded that replacing the valve cover gasket and the cam cover gasket would eliminate my oil use. It did not. I cleaned the engine and found only very little seepage out of the crank case cover gasket, and some fresh oil on the oil pan (but once cleaned off, it did not reappear).
Today the mechanic is replacing the water pump (it just started leaking like mad) will flush the system and perform another blow by test.
Please let me know whatever you can -- at this point I'm a little mistrustful of my mechanic and am afraid that he is trying to suck me into an unecessary head gasket job.