Well I jacked it up and took a look this morning. The leak appears to be about 2-3 inches from the rear of the block at the junction of the block and head (on the passenger side as mentioned earlier and almost the exact location where I have a slow oil leak) -- looks like the head gasket for sure but if anyone knows of another source, please speak up.
Now the hard part -- finding an independent with experience on 300E's that I can trust. Anyone know of one in my area because I trust absolutely no one???
I have the sinking feeling that I'm going to have to go to the local MB dealer for this.....