I think this is related to the front gasket, and most people seems to say "oh yeah, that's the normal thing to happen on W124..."
I believe this is a common W124 problem. Now, the question is I have conflicting stories:
1) Don't fix it if the leak is not significant, like 1/2 qt / month. In fact mine leak does not even call for inter-oil change replenishment only visually disturbing, and a source of continue pitch from my service technician to get it fix.
2) An engine refurbrishment of machine job to re-smooth the valve cover to spec. The reason given was the original manufacturing defect causes leak to happen at the 'weak spot', and by re-surfacing, the weak spot is gone. Otherwise, the leak will re-occur another 50K down the road.
3) Just replace the gasket. But I wonder if the gasket is a paper thin piece of material (cork ?), why would it leak in the first place if it is clamped between mirror flat gasket head and engine body ?
4) Aluminum head on iron cast engine body will warp the head/body interface due to different heat coefficient of the 2 materials.
The car in question is 300E, 2.8L, 1993, 90K miles. It is about going for a 90K service, and probably between 90K to 120K, I would change the timing chain, and a perfect time to fix the leak, if required.
Since I am also replacing the suspension, so I assume I like to keep the car tip-top for to reach 160K in 2-3 years more.