Just an update on the situation. I just got off the phone with my tech and he said SEVEN count 'em SEVEN oil tubes were blown out! I doubted him and he said he'd save them for me to look at. I asked him about the power loss and he said that with all of those missing he's surprised it didn't lag even worse. Apparently you're right Dr. Diesel, the lack of oil pressure has a significant effect on the valve timing, etc. Unfortunately I'm across the country right now so I haven't had a chance to drive it yet. I'll report back soon with that.
The tab you ask? Almost $1100. Yikes. I know, it's worth every penny, but cripes! The good news is, I think I found a great mechanic. Without calling and pestering me for approval, he went ahead and replaced all (16?) tubes and put in new upper guide rails because he said they were looking brittle. He also replaced some other tubing/parts he said looked brittle. What's more I asked him to flush the cooling system, but he came back and said he didn't do it because the coolant looked fresh and must have just been changed. I'm impressed. BTW, that $1100 included a $220 transmission fluid/filter change I had asked for. I think it was a fair price for good work.
A word about the warranty. The tech said they were the shadiest warranty company he's ever dealt with. They only pay $45.00/hr. shop rate, take it or leave it! With the $100 deductible they ended up only covering $350 of the +$800 tab for the oil tubes! If anyone knows about CARS warranties or has had a similar experience, let me know. So far I am totally unimpressed and I'm thinking about having my lawyer write a nasty letter.
So since I've bought the car I've already put close to 2 g's into it making it perfect. The funny thing is, it doesn't really bother me at all! It's a BENZ and it's MINE!