W210 (M104) - Check Oil Light on but dipstick level is fine.

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I have a 96 W210 with the M104 engine.
From time to time I get a check oil light.
So After I let the car sit for about 30mins, I check the dipstick and it shows the oil to the top line. So I figured maybe this was because the oil filter drained during the wait and that the true level is about half a quart lower. So I added oil. Everything was fine. Drove the car for a few weeks and then another Check Oil level light comes on. So I check it and the level is now about half a quart above the top line. I am confused.
There is no dent or deformation on the oil pan from what I can tell.
By the way, the light does not always come on. Just once in a while.


Anyone have any ideas as what is going on?