Not a solution, but an oil smell and at same time a dash display warning happened to my mother earlier this week. Car is 2002 C240 with 4400 miles.

I tested the car and could find a faint odor of oil but no dash warnings.

Did some examining of the car, removed bottom two engine encapsulation shields, engine front snap on cover, plus battery and brake covers. I found no leaking oil.

Found that the design of this car puts HVAC blower motor and filter behind battery but basicly exposed to engine compartment. I noticed that compared to my 1998 W202, the brush motor top on our W203 C240 had rust on top of spindel, while on my 1998 C230 the top spindel of blower has no corrosion, blower on my 1998 C230 is situated in a more remote location to outside elements than on the 2002 C240.

mtokfmak, have you gotten any dash warning lights concerning oil level?
or dash warnings at same time as (oil) odor?

And do you know what caused the oil leak on your car, what part was fixed?

I will be taking car into shop shortly, hopefully the onboard computer had kept a code on what the dash warnings were and thus help diagnose the problem.