What year is the 300E? The coolant temp sensor is located on the end of the cylinder head on the driver's side near the firewall. There is also a seperate sensor for the coolant level. It sounds like yours is defective causing the low coolant light to remain on. You may want to check your fuel pressures to see that they are up to par. I have found low fuel pressure to be a common cause of driveabilty issues on the CIS equipped M103.
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1989 300CE
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