From what I understand it is a common problem with M112 engines due to poor crankcase ventilation with the design. I get this condition with our E320 in colder months, but as soon as the weather gets warm the sludge in the oil cap disappears immediately. There is never any sludge on the dipstick or in the oil when it is drained out.

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Jonathan

2011 Mazda2
2000 E320 4Matic Wagon
1994 C280 (retired)