what sensor is this?
 

'97 SL500. This sensor has a single electric connector at the end. It is right above the oil pan held by a C clip to the engine block. It is located on the passenger side, very close to the oil filter canister. It is not oil pressure sensor switch which is much bigger. This one is about 1.5" long with thickness like an index finger.

I notice a little oil leak around this sensor. I tried to remove it from the engine block without success. I can move it in and out slighter with hand so it is not firmly pressed to the block but I can't pry it out any further with a screw driver. I took the photo showing to a local dealer but no one can tell me what this is.

photo attached. Looking up from under the car.

Looks like the oil level sensor. Don't try and yank it out - there is a backside to it - you have to take off the oil pan to get to it.

definately is the oil level sensor plug, the actual sensor is down near the oil pump, as larry said the only way to remove it is by dropping the pan and doing it drom there

Thank you so much. That is exactly what it is. Where did you get the photo? The factory parts diagram CD sucks. Do you know if I can buy just the O-ring seal?

Yes you can...right around a buck or so.
But!....You still have to take off the oil pan to get to it, so add the price of an oil pan gasket. And, if you're going to drain the oil, might as well install a fresh filter and oil ;)

i suggest if you are going through the trouble to remove the pan etc... just replace it, it isn't that costly