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The first thing you need to do is to temporarily install a mechanical gage and verify the reading.
I've recently seen a M103 engine get toasted because of low oil pressure, it was assumed that the gage was faulty. It was not....
The pump is run by a chain off the crankshaft. It's unlikely that the drive has failed, since you do get oil pressure at startup.
Potential problem areas are the pump itself, clogged pickup screen or a failed pressure relief.
Get it checked out posthaste before any damage is done.
Jim
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14 E250 BlueTEC black. 45k miles
95 E320 Cabriolet Emerald green 66k miles
94 E320 Cabriolet Emerald green 152k miles
85 300TD 4 spd man, euro bumpers and lights, 15" Pentas dark blue 274k miles
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