Car: 1990 300SE

Ever since we bought the car a few years ago, the oil pressure would sit at around 1-1.5 bars at idle and go straight to 3 when driving. But lately, when cruising in the city or accelerating, the maximum would be at 2.5 and the idle would go as 0.5 and sometimes slightly lower. We thought it would be the oil pressure sensor, but lately, it sometimes goes slightly below 0.5 at idle and the engine would make a slight noise. It rarely happens, but when it does, the only thing I can do is raise the rpms by about 100 and the oil pressure would go to 1 (and the noise would go away). It is not low on oil because that is always being checked every week. Although, we still do need to check the actual oil pressure with a gauge.

My dad thinks it might be the oil pump, and/or the rod bearings and main bearings. Any advice?

If we had to go through all that work, how much would the cost difference be estimated if we put another engine in, such as the M104?

The parts would cost about $460 if we were to replace the oil pump and main and rod bearings.