Having a 1987 300D as the reference, the low oil light comes on when the lead to the sensor is grounded. The sensor is fit with o-ring into the upper side of the oil pan and has a connector pin for a signal wire. This wire goes into the wiring harness at some point.

Most likely reason for a sudden appearance of the dash light, after working on the car, is a pinched and grounded wire to this sensor in the engine compartment.

Hope this helps,
Ken300D