Might just need a new valve cover gasket set including the donuts around each spark plug hole.

http://catalog.peachparts.com/ShopByVehicle.epc?q=1994-Mercedes--benz-E3--0--Sedan-Engine--Mechanical&yearid=1994%40%401994&makeid=63%40%40MERCEDES%2DBENZ%40%4063%40%40MERCEDES%2DBENZ%40%40X&modelid=6391%40%40E320+Sedan&catid=240154%40%40Engine+Mechanical&subcatid=240451@@Valve+Cover+Gasket+Set&mode=PA