The oil level sensor is located down by the oil pump, obviously in a place where it can detect the level of oil in the oil pan. The sensor wire runs up on the right/passenger side of the engine block. You need to take off the lower oil pan to get to it, then a pretty easy job.

The oil level sensor, like the oil pressure sensor, alternator and starter, is not on the main harness but on the starter/lower harness which runs on the bottom right side of the engine. Lower harnesses have the same degradation problems as upper harnesses. If your recent work on the cooling level sensor was related it could be because you spilled some coolant on the lower harness. Or it could be just a random untimely failure.

http://mb.auto.pl/wis/w124/CD01/Engine/119/18-3300.pdf