Cause of 4Matic dash light on?

[Fintail Fan]

Hello, I'm new to this board, but have been reading it for a while and now have a question that a topic search here hasn't answered. I have a 1992 300TE 4Matic wagon with 127,500 miles which I bought used with 107,000. A little while ago, the dashboard 4Matic light that comes on at start up doesn't go off once the engine starts. I took it to the dealer and they said without looking at it that the transfer case needs to be replaced due to leakage, ($4500+). But, they said I could drive it for a while without damage, but not to turn off the system or I would adversely affect the suspension. A few days ago though I had an emissions test and when they put the car on the dyno, all four wheels spun perfectly without any noise or anything. There also has always been hydraulic fluid in the tank, (though low), so now I don't know what's going on. Is there anything else that could cause the dashboard light to go on? Am I damaging something else by still driving the car with the light on? I love this car almost as much as my other one and hope to keep it just as long. Thanks.

I have a 1991 300E 4Matic. Just a beginner, but I've experienced 4matic fluid leak for some time. Basically, the light comes on when the 4Matic system needs attention. The dealer is no doubt correct about needed repair, but......low fluid level will also cause the light to come on. Try filling the reservoir with recommended MB fluid. You will probably have to disconnect the battery for 15 minutes or so for the light to go off regardless of the problem. If the light goes off, then I think you can drive it without worry if the dealer also says so. If the light comes back on, then the needed repair is probably the only way to fix it. Fortunately for me, my dealer said i just need a hose... still not cheap.

[renok7]

You have the dreaded transfer case internal leak (i.e. hydraulic fluid leaking into the the ATF side of the transfer case). If it doesn't leak much you can go for a while yet. Have your transfer case ATF replaced (less than a quart) and check your hydraulic fluid level regularly. My transfer case doesn't leak (yet) but I still replace my ATF every fall as an inexpensive preventative measure. You may wish to do it at every oil change. To eliminate the 4-Matic error code you need to disconnect the battery for 15 minutes or so and it should resume normal functions. Make sure that you have the code to reset your radio B4 you do so. You can also disconnect the 4-Matic brain behind the battery but it is harder to get at. The TC will need R&R when it begins to shudder & bind. You'll know. Mine is the 300E so I don't have to concern myself with the self-leveling suspension. I have gone several months with the TC in the Test Mode with no ill effects. When my TC goes I don't intend to have it replaced. I will simply drive my 300E as a rear wheel drive. I don't look forward to this as this is the best car I've ever owned for winter driving.