I don’t think I’ve seen a case that bad but mayonnaise on an M112 oil filler cap is oddly normal. Some say the riser design causes that. If there’s no oil in the coolant, let it be. You’ll not hear many stories of M112s blowing head gaskets even when overheated.

IIRC the oil level check needs about 5min after engine shutoff to register. You’d think it wouldn’t offer you to check it won’t check.

Replacing the oil level sensor requires dropping the lower pan. When they fail they throw errors. It’s probably functional if there are no warnings. It’s not a simple switch. It sends an oscillating signal or something like that when it’s working so the ECU would know if it’s not.

Make sure to use good quality synthetic, and I’ll add group IV/V synthetic rather than even M1 0W-40, if following FSS intervals. Otherwise any synthetic should be fine to about 5K miles. Take that advice with a grain of salt. Sixto is not the oil guy.

Sixto
98 E320s sedan and wagon
02 C320 wagon