Just last weekend, after scouring the archives, I replaced the infamous 'U' seal on the top part of the timing cover. It appears to have solved the problem. Indeed, it was not a tough job at all.
Even though I have the service CD (mine is a 90 300SEL), this site has been a treasure trove of information and invaluable, particularly if you do a lot of work on your own.
Thanks to al!