An educated guess leads me to believe the oil pressure sender is the problem. I've replaced dozens of these compared to guages. Now, if the fuel guage and coolant temp guages are acting strange it's a different story.

Concerning the timing chain? It's true the M103 doesn't have the same issues that some other MB engines have with timing chains. I saw a 103 engine go 275,000 miles on the original chain. I replaced it when I did the valve guides. I checked for stretch and was amazed when it showed NONE! I replaced it anyway because I had the head off and it cost next to nothing for a new chain. Having said that, I've also seen a few 103's break chains at barely over 100K. If it was me, and I planned on keeping the car for a long time, I'd replace the chain. It'll cost you a couple hundred bucks but if it breaks it'll cost a couple thou'. Just my opinion.