Check the heater hose coming out of lower back of the engine block on the driver's side, especially where it is connected at the block. The hose may have cracked or the o-ring may need replacing. That happened to me. Easy DIY.

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87 300e (white/black; amg body kit)
88 300ce (red/cream; amg body kit)
93 300ce cabrio (white/blue/blue top)
93 300ce cabrio (black/grey/black top)
98 ml 320 (totaled @ 137,000 miles)
99 clk320 (black/grey/black top)