The rear sensor on my '87 560SEL and SEC are in the right (passenger) side of the differential, up front. It reads a ring mounted on the pinion shaft.

I'd clean my front rotor sensing rings (don't remember the right name - the grooved piece the sensors read) before doing anything else. IIRC, a compressed air blast will blow the crap (pun intended) out of the grooves.

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There is a very fine line between "hobby" and "mental illness."
FrankenBenz: '87 560SEC with an '02 cammed LS6 and custom 4L60E.
Bling: '87 560SEC, ported/polished, lowered
Lisa: '87 560SEL, lowered