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If the W124 is the same as the W201 you should check the heater control valve for leakage. On the 87 W201 this is a slide valve with lever arm that has a seal. Mine was leaking and dripping out next to the transmission. It was a very easy fix. The valve is located on the W201 under the leaf screen below the wiper.
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Tom Savage
Vienna, WV
1984 300D Euro
1995 S320
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