A good sized vacuum leak will also cause surging idle. Before I fixed all the vacuum leaks on the 560 it too had a surging idle accompanied by the fluctuating oil pressure - as idle went up so did pressure. Having head/valve work done recently leads me to think there is a vacuum line or two dis/misconnected.
'73 280SEL 4.5 (9/72)- RIP
Only 8,173 units built from 5/71 thru 11/72
'02 CLK320 Cabriolet - wifey's mid-life crisis
2012 VW Jetta Sportwagon TDI...at least its a diesel
Non illegitemae carborundum.