It is most likely the sensor. I had this problem with my 92 300E. There were no leaks and it would come on intermittently regardless of the actual coolant level. I ended up buying another sensor for 20 bucks although after I pulled the old one, I just found that it was dirty. Wiping off the accumulated brown stuff from between the magnets should do the trick. Removing the sensor is very simple. All it takes is a pair of snap ring pliers. Don't forget to remove some coolant from the reservoir first though. I just sucked some out the top. Good luck.