My inspections/conversations (thanks Ray) have confimed my thoughts on the matter. It appears to be a combination of valve cover gasket and the sparkplug rubber seals. Benz locally was telling me that it could be an exhaust valve blow-by forcing the oil up around the spark plug, but at this stage I just can't seem to comprehend this. The major portion of the leakage appears around the spark plugs. These gaskets are harder than the valve cover gasket so I have ordered the replacement gasket and will give it a try.

I'll report back with lower quality pictures when I get them and install them.

Ron

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1995 E320 -171k-km
1995 S420 -333k-km