Yes, I also think, your head gasket is gone, as it ddevelop leak, the high pressure during the ignition, will boost the engine into your water jacket, so, water will mix with oil.

you can try the compression test and see whether the pressure of each cylinder is the same or not, if not, or incrediblly low, than it is more likely is the head gasket.

you can also try to measure the pressure of your cooling system, it will normally about less than 1 bar to 1.5 bar.

For my own point of view, I think, you better solve it out as soon as you can, unless as it turn to be more serious, the high pressure of your engine will damage your cooling system components, such as the radiator, heater matrix....

I have actually try that before, the high pressure bomb my heater matrix, and steam coming out from my air vent!
but not the Mercerdes.

Hope this can help you!!