Lee, your process for installing the new upper timing chain cover gasket is proper ... a dab of sealant at each end of the U-shaped gasket only. If you're sure the gasket remained in place (in the thorougly clean recesses of the upper and lower timing chain covers) when you set the upper timing chain cover there should be no leaks.

That's exactly the way I did the job successfully on my daughter's 1991 300CE.

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Fred Hoelzle