Capt. Kirk,

This is one of those procedures I learned the hard way. I now always do an engine wash before I take the valve cover off, as once it is off there is nothing to prevent you from scattering greasy road grit into the exposed mechanical stuff. And it is that much harder to ensure when you put things back together there is none of that black, greasy grit under the gasket. The first time I did this I was aghast at the prospect of having the stuff fall in or get scraped into the gasket seating area, so I spent about two hours and two rolls of paper towels wiping the area down being careful to push the crud out and away from the guts. Power washing the area before the job is much cleaner and faster.

I do not use a gasket sealer, but I do use a high temperature synthetic grease compound (Redline makes one and you can find them at NAPA or any other auto parts store) to seat the gasket on the cover and the gasket on the cylinder head. A thin coating on each CLEAN surface prevents damaging the gasket when you slide the cover around to align bolt holes, and provides a filler that has to be pushed out of any defects before oil can leak out. These gaskets do not see oil pressure behind them so an assembly grease will work well to keep the joint dry.

Any dirt under the gasket and you will be sure to have a leak. The same with any sharp nicks, dings and raised metal on the cylinder head gasket seating surface. These have to be removed and smoothed into the adjacent surfaces or the joint has a built in drain line to the outside of the engine. In your case I would look carefully at the metal and the gasket in the area of the leak to find evidence of why you have the leak. Also inspect the fastener in that area - try running the nut down the stud by hand with the cover off, looking out for roughness or galling. Any evidence of difficulty turning the nut is an opportunity for the joint to be assembled with uneven closing force at each fastener, which is also a formula for causing a leak.

Be careful not to overtighten the cover fasteners, as I did on my 300E recently, and broke one. On the Diesel models this is a little more of a problem as the male part of the fastening hardware is a stud sticking out of the head. This configuration can also contribute to damaging the threads removing and installing the cover.

Good luck and I hope this helps. Jim

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Own:
1986 Euro 190E 2.3-16 (291,000 miles),
1998 E300D TurboDiesel, 231,000 miles -purchased with 45,000,
1988 300E 5-speed 252,000 miles,
1983 240D 4-speed, purchased w/136,000, now with 222,000 miles.
2009 ML320CDI Bluetec, 89,000 miles

Owned:
1971 220D (250,000 miles plus, sold to father-in-law),
1975 240D (245,000 miles - died of body rot),
1991 350SD (176,560 miles, weakest Benz I have owned),
1999 C230 Sport (45,400 miles),
1982 240D (321,000 miles, put to sleep)