I have a 1991 300E that I bought new on 7/1992. Sometime around the 50K mark I noticed an oil leak from the rear corner of the engine and that there was ENGINE oil in the coolant.

This car had the coolant changed ANNUALLY using a 50/50 mix of M-B coolant and distilled water. It also had Redline Water Wetter added.

This is a well known problem with the M103 and M104 engines (along with oil leaks from the timing chain cover).

It failed not because of a lack of maintenance. It failed not because I used Water Wetter. It failed because of a engineering problem with the head gasket on the M103 and M104 engines.

I had the head gasket replaced by a large M-B dealership in Scottsdale, AZ. That was 1.5 years ago. At that time they told me they averaged at least one head gasket a week on these engines.

It's pretty easy to tell if what's in the coolant is ATF fluid or engine oil. Besides, if there is engine oil leak from the rear corner of the engine, it'll confirm what the problem is.

It you have any doubts, take the car to a qualified Mercedes shop.