I have this sound too. It doesnt come on all the time - just when its hot from too much running. My colleague test drove the W126 - he's an expert in all this kinda things, and said its **definitely** the steering box.
So - I shall be replacing the steering box in due course (when I have the time), and then I shall have an absolutely perfect 300SE which I intend to sell and maybe drive away with a C200. I'm tired of driving a huge German yatch sporting Made-In-Czech-Republic-Bosch headlights around a small town.
Or maybe, a Bimmer 318i might just do fine.
Is this mid-life crisis?
126 tailed by a 203, 129 leading the pack.