Responding to Can-Do. The line you ask about is a vent line to route any gasoline from a leak in the fuel pressure regulator to the air intake so they can be safely burned.
I too have the same problem with my 300e. I am in the middle of serious diagnosis to find the problem. I have changed the fuel distributor and all the injectors with no improvement. I was convinced at one point that the FD was the problem. I loosened all the fuel line connections at the injectors and cylinder #2 would not leak any fuel. All the others did. I replaced the FD and there was no change in the leaking fuel. So I changed the injectors and that cured the leaking fuel test. However it made no change in the way the engine runs. I am wondering about the condition of the CATS.
I am doing through diagnostics around the CIS computer systems. I am convinced it must be an electrical related issue with some sensor or input to the CIS computer. I will let you all know what I find.
I got too many cars!! Insurance eats me alive. Dave
78 Corvette Stingray - 3k
82 242 Turbo Volvo - Manual - 270k
86 300e 5 speed manual - 210k
87 420sel - 240k
89 560sl - 78k
91 420sel - 205k
91 560sel - 85k
94 GMC Suburban - 90k
97 Harley Davidson Heritage Softail - 25k
00 GMC Silverado 1 ton 30k