It may be the upper timing cover. After all, you were working in that area replacing the tensioner. Is it possible that you stressed the cover and thereby disturbed the sealant?

I would remove the fan shroud get a good light and see if the Timing cover is leaking. Although this is a pain to fix, it is less work than the headgasket. However, if the headgasket is original, it will go sooner or later. I know that some people on the forum don't advise just doing the upper timing cover without doing the headgasket. But if that was all that was leaking, I would try to do that fix anyway because it is easier and there is less of a chance to screw things up. The head is very heavy and you would need a hoist to remove it. Also, you have the hassle of dealing with the timing chains and the potential variable valve timing nightmares.

The other thing you could do is spend $100 and ask the dealer to tell you (show you) where the leak originates.

This is why I believe that anyone buying a 94-95 E320 should deduct the cost of the headgasket and wiring harness from the market price of the car - unless these items have been fixed.

By the way, if you need a wiring harness, contact the dealer soon, before the car turns 10 years old. They may replace for free, considering the low mileage on your car.

Once you get these things fixed, you'll love the car. At first, I too was surprised about these kinds of quality problems. But the rest of the car seems pretty well sorted out.

My theory is that the best way to go with a MB is to buy a low mileage Starmark car before the original warranty expires. That way you can extend the warranty for three more years. By then, all the issues with the car are known, and you can get the dealership to fix everything under warranty.

-Charles