been here. as i have both a 560SEL & SEC.
it is valves and valve guides, i think.
i don't think that you mentioned the mileage on your horse, but it may not matter. my SEL which was driven daily and hard, didn't start consuming excessive oil and smoking until it had gone beyond 220,000 miles[14 years].
on the other hand, my 560SEC, which was driven by a woman who never drove it hard, never got it hot, needed to have the top end renovated at 60,000 miles[14 years].
the SEC was the most amazing case. no smoking most of the time, but if you put your foot into it while decelerating[red light turning green, for example] it would leave the most astonishing cloud of white smoke.
and by the way, when you pull the head, replace the cams and the roller chain. no reason not to.
unless you are going to stop driving the car.