I went thru this once with the same motor and finally solved the problem by performing a cooling system pressure test.

You can rent such a gadget at Auto Zone or perhaps another parts store in your area.

It won't do you any good to ponder where the leak is until you can pressurize the system. If this doesn't expose the problem, then consider a previous post above that suggests an internal vs. external leak.

__________________
Mike Murrell
1991 300-SEL - Model 126
M103 - SOHC
"Fräulein"