Oil + CAT = Trouble ??
 

My 92 300E 126,000 kms. ( 75,000 miles ) has the classic head gasket leak...no oil in coolant yet, but just had into a shop, where the teck showed me how close the oil had come to the cat....advise given...get it fixed, or watch it on long drives, as the oil will one day meet the cat and it may ignite !! Any Comments ?

He is correct.
Most cars used to have a sticker, telling you not to park in long,dry grass, as there is always the risk of a hot catalytic converter igniting it. ;)

If that were the case then a good precentage of the cars on the road would be on fire right now because a valve cover leak on an ex manifold is very common and more of a threat. You're probably seeing a dried strip of black goo traveling from the engine down the underside of the ex tube? Very common....

I let the oil leak on my 3.2 liter M104 go for a long time and the leak was real bad.

My exhaust manifold, catalytic converter and whole tail pipe was covered in oil, and it never caught on fire.

I don't think there is any risk of fire as many cars have oil leaks that cover the exhaust manifold, and even the engine block, which gets just as hot, if not hotter, than the cat.

I can suggest that if your cat gets soaked in oil, like mine was, it will ruin it.

I used to own a Fiat that had a pretty good leak (what Fiat doesn't?) that would drip directly onto the exhaust manifold about 2 times every 15 minute trip I took. Nauseating, but not a flame thrower for sure.