I figured what was wrong with my fuel tank. At the weekend I took the tank out of the car to remove the aluminium tube bit of the fuel sender. It was rolling around too much in there!
It was then my dad and I reckoned the fuel tank had been dinged or bent, maybe by a heavy load in the boot (trunk, heh heh) hitting against it. We gently pulled it out using a short bit of wood and a rope inserted in the fuel sender hole. After a little bit of pressure, the tank 'popped' out, and now the fuel sender hole is at a little angle off the vertical, where previously it was vertical.

It was this angle that stopped me from taking the fuel sender unit out. Now I have to get a new sender unit!!

gerard

PS, I thought originally that a sealing layer was coming away and pressing on the sender unit. It was fine, it was the fact that the hole was pushed back, and the sender was then pushed back against it. I dont think it is a seal either, it looks more like piping or channels, Mercedes puts a lot of plastic bits inside the tank!!