Thanks. Well, that is a foolish design isnt it? They should have made those shorter. Anything to have to pay someone for more labor.

I wonder how much this would cost at a typical shop?

Well, I confirmed that its definitely that hose. I drove the car 80 more miles today. It dont leak when the car is running... only seeps after its been off for awhile.

It had that small pooling in that crevice and I felt and the hose was indeed wet underneath when I felt it. We tried tightening the screws, but they wont budge.

I agree that is probably the head gasket leaking.

I had the same problem with my 1988 260e. I put off replacing the head gasket for two years after discovering that I could stop the leak by loosening the cap on the coolant recovery tank. It is not a recommended practice because the reduced coolant pressure will lower the boiling point, but since I only drove the car a short distance to work it didn't matter.

I finally broke down and replace the head gasket myself. parts were a couple hundred dollars including new head bolts. I also replaced the valve stem seals while the head was off.

Thanks. We have confirmed however that is that short hose that runs from the head to the thermostat area that is leaking.

Leak stopped... it was indeed the short coolant hose! I put on a new clamp and presto. Leak stopped. Thanks for all of the replies!

Wow, what an old thread of mine... 6 years ago! I ran across this when doing a search on google, lol. I thought I would update it incase anyone else has this issue while I was here.

I was a little dumb when it came to this car, lol. Well 6 years later we still have the car and it is going great. It has been my moms car for the last 4 years, though I still drive it often.

That leak toward the front of the engine is still there, just have to add a little oil, about a quart every 3k miles. Still no major problems with the car. We have only had to replace a ball-joint, regulator and coil since the 8 years of ownership. There is an issue with the ABS, but as an '88 model, no surprise.

You were right... 6 years later, still going and haven't replaced a thing. Just have to add about a quart of oil every 3000 miles. We did finally replace that short coolant hose last week. Also, it is a shame, but still has the green coolant in there, no problems, but I am going to change it this week. I know I put alot of things off on this car due to money issues, but I am much better off financially than I was 6 years ago, I have a much better job with great pay and have since won a brand new car that I sold and put all of the money in my savings (which I do not touch, lol), but now this my moms car, so my dad takes care of buying things for it and I normally end up doing the work, lol.

It actually wasn't too bad and it went 6 more years and was still ok, but we actually changed it earlier this week. We actually just cut the pipe a little bit and got the new hose on in about 15 minutes. Glad we didn't have to remove the water pump.