I have recently noticed what appears to be fuel leakage at the drivers side portion of the rear differential. The greater part of that half of that side of the assembly appears to be covered with a fuel like coating. The pavement directly below shows light coverage after a day or two. The exhaust pipe strap is broken and covered. Any ideas as to a possible cause and future problems?

Could be a rusted out fuel line.

What model? On the 123's it's not uncommon for the fuel line to rust out where it bends to go up and over the rear trailing arm. This is on the driver's side. Another trouble spot is the rubber hose right at the fuel tank outlet.

Len
'83 240D 340,500 miles original owner

Also on the w123 you have rubber lines that connect the tank lines to the feed lines going to the engine compartment. check to see if they are leaking.

Dave

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1970 220D, owned 1980-1990
1980 240D, owned 1990-1992
1982 300TD, owned 1992-1993
1986 300SDL, owned 1993-2004
1999 E300, owned 1999-2003
1982 300TD, 213,880mi, owned since Nov 18, 1991- Aug 4, 2010 SOLD
1988 560SL, 100,000mi, owned since 1995
1965 Mustang Fastback Mileage Unknown(My sons)
1983 240D, 176,000mi (My daughers) owned since 2004
2007 Honda Accord EX-L I4 auto, the new daily driver
1985 300D 264,000mi Son's new daily driver.(sold)
2008 Hyundai Tiberon. Daughters new car

I just did these on the SDL. The return line was dripping fuel all over the axle boot. After 18 years, the rubber gives up the ghost. Everybody should take a look at these.