Here is an image of the location of the 2 sensors on a M120.
Why 2? The M120 is similar to 2 M104 "glued" together.
The two separate engine management systems talk to each
other thru the CAN bus and I guess they must both get the
crankshaft position sensor signal to agree that everything is ok.
Both of the need the speed of the flywheel and the TDC.
The sensors are the two black ones sitting on the engine side where
the box is bolted;
http://community.forenshop.net/forums/index.php?mforum=W140&showtopic=3378
(but again, this is just one possible explanation on you problem)
br,
syljua