CEL with P0400 Code - how to fix EGR problem?

[luvsoccer]

New poster - have a 1996 Mercedes E300D with 122K miles and a recurrent check engine light - always a P0400 code indicating problem with EGR. Have had it serviced recently at dealer where they cleaned the valve and recirc chamber (and commented they were not very dirty nor gummed up) only to have problem reappear the next day. Despite what dealer said "there is no problem running indefinitely with code tripped on - it will not affect performance," the engine does not have as much power when code is tripped on. It's power loss is similar to what you would notice with Air Conditioning ON vs. OFF.

Here's the interesting part - when I burn straight Petro diesel fuel the light only comes on occasionally. When I burn any blend of biodiesel, the light comes on much more often. Could it be a sensor that's 'too sensitive?' Not familiar with the architecture of the EGR system on this engine, and don't want to indiscriminantly start changing out parts, but do want to get this resolved, as continually resetting the CEL with my code reader is a pain. I do it now to keep the engine power from being degraded.

Where is the sensor for this system located? Is it integrated into the EGR valve? Appreciate any counsel from anyone who has experienced this problem on this model engine and successfully fixed it. I do not want to bypass the EGR as I do notice a power loss when the CEL comes on.

Thanks in advance.

[TMAllison]

Follow the vacuum line connected to the EGR to the transducer mounted on the firewall adjacent to the main fuse box.