I too have a 124 with some oil seeping from the front portion of the head. The car has 165,000 miles on it. The problem started to become very obvious right after changing the oil and pouring in Mobil 1. Since then I have changed to Vavoline MaxLife. The oil consumption has been significantly reduced.

I have also noticed that I loose some coolant over time, especially during hot weather. If these two symptoms are indeed related to the head gasket, would re-torquing make sense? Is this hard to do? What torque spec would I use?