I concur with Larry.

This forum is full of techs commenting and disagreeing with us when we say that M103 head gasket failures are common.

The techs always say that in their umpteen year experience, head gasket failures on M103's are rare. M104's have the common head gasket failure.

Plus, even in Stu Ritter's book, he points out and shows in pictures why the gaskets fail, and comments that the leak is manifested by an external oil leak.

It is very rare to see an internal leak of coolant in the oil.

Your problem to me sounds more characteristic of ATF fluid leaking internally into the coolant. It happens and usually surprises owners that this is even possible.

Last, this also comes up from time to time. but the techs also always say that M103 and M104 engines never require a replacement of a timing chain. They just don't do it. The chains are short, don't change direction multiple times like they do on the V8's, and the tensioner does a good job of keeping the chain tight. You may change out the tensioner and the guide rails, but the chains are not a replacement item.

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Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".