I went through this on a 300SEL about a year ago. Basically, I think worn valve guides and crusty old valve seals let enough oil go through the motor that it fouled the catalyst bed that deals with the NOx. There are two in a 3-way cat. One deals with CO and HC, one deals with the NOx.

Anyway, after replacing the valve seals, I made sure everything with the EGR, fuel injection, and ignition was up to snuff, cleaned the injectors, set the pressure in the fuel distributor, used some combustion chamber cleaner, even cheated a little bit on a second retest by backing out of the ignition timing by fooling with the resistor and the vacuum advance, and I couldn't get the car to pass the NOx portion of the test. I was hoping the cat wasn't smoked, but... finally I swapped out the cat, and with all that other stuff sorted out it blew right through the test with flying colors.

Oh, and I used a DEC cat, but it was a pile of trash. Mediocre welding, crimped bends, small tubing, bad fit between welded sections, non-OEM design with both downpipes merging into one small pipe before the cat, didn't even seal against the manifolds. And I had to put a spacer under the passenger side engine mount to lift the motor up a little bit so the forward downpipe didn't hit the crossmember on hard acceleration. Trash! I had to attack it with an angle grinder, die grinder, and MIG welder before the thing would bolt up and seal. Never again. After reading so much over the years about DEC quality, it was SUCH a letdown. Take a look at this. Seems like a nice deal, and at least it has two downpipes all the way to the cat:

eBay auction 190118202305