I have a 93, so I'm not sure configuration-wise how much effort is needed to replace.

I suspect it could be a DIY...drain the oil and undo the pan bolts to remove the pan. That would allow access to the oil level sender.

But I would not rule out a problem with the harness attached to the sender. You are not plagued with the harness problems of the W124-series, but even with the main engine harness replaced in mine, I inspected some ancillary harnesses and discovered severe deterioration...one particulary bad harness eventually caused my oil pressure sensor to fail...

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2009 ML350 (106K) - Family vehicle
2001 CLK430 Cabriolet (80K) - Wife's car
2005 BMW 645CI (138K) - My daily driver
2016 Mustang (32K) - Daughter's car