A while ago I posted a thread about my '98 E300D losing coolant. An oil analysis revealed that some of it was getting mixed with the oil. Not good.
A pressure test revealed that the engine held pressure after reaching normal operating temperature (I'd say about 78C). The guy who ran the pressure test said it's a blown head gasket and offered to replace it for $2,500. As an alternative, they offered to do a coolant treatment for $350.
I went with a third option: went out and invested $35.00+tax in a Rislone head gasket treatment; followed the instructions on the bottle, and so far, 4 weeks and 1,200 kms later, the coolant level is constant and the engine is running fine.
Hopefully this helps anyone who's facing similar problems.
Please note that I used the HG repair fluid as a last resort, since I do not have the time to invest in a HG replacement. Ideally, I would have liked to spend the time and do the replacement myself, but that's not an option right now.
Thanks to everyone who contributed with advice!