I recently started to experience the fuel gauge needle swinging down below the R mark and then back to its current reading. This only occurs when the fuel level gets near or below half a tank. Any help would be greatly appreciated.

I think there are some other threads posted regarding the same situation. The problem is somewhat fuel related.

Had the same thing happen to mine. My wife claimed that when the level would get below 1/2, it would one day zip down to R, then back to normal eventually. I never believed her because I couldn't recreate the scenario myself. Then one day while I was driving, Bingo! it happened.

I haven't done anything to solve the problem, and it hasn't happened in ages. So I am of the belief that it is a fuel related problem.

Do a search on "fuel gauge" and you will find some technical descriptions about this cause.

Wouldn't this be more of an indication of a problem with the fuel gauge sending unit, or perhaps the gauge itself?

The sending units are the problem. Mine does the same thing, only mine is consistantly problematic. The low fuel warning light is on a different circuit and has remained acurate on my W126.

Provided it is the fuel sending unit, where on the '88 300E would I find it? I do not have the shop manual for this vehicle.

My shop manual does outline the removal of the sending unit and connector. To get to it, you have to remove the carpeted panel in the trunk just behind the rear seat. The sending unit is held in place with a large retaining nut.

The manual does state that if the tank is full, to drain at least 8 litres of fuel before removing it.

Thanks for the info Giulio. Would your shop manual happen to have the part number? I would like to order one and have it on hand prior to removal of the old one.

Unfortunately no part numbers specified (it would be a huge book if it contained all of that data), but FastLane should be able to assist you with that.