zero oil pressure @ operating temp and in drive...
 

Our 1995 E320 is dipping down to zero Bars when its in drive when i accelerate it shoots up to 3 immediately , but here is the strange thing, i open the oil filler cap and is saw oil shooting at the cam shaft means that i still have oil pressure when the gauge reads at 0, It was all fine until today... What could be wrong, oil sensor issues, oh when its cold oil temp goes up to 3 bars(Obviously the oil is thicker hence higher oil pressure)

Oil pressure sender is going bad. Classic failure symptom. Its attached to the back of the oil filter mount. Unscrew, install new one. Problem solved! :) Use a VDO one (costs more)....aftermarket ones die in a short time. (I would know, I had one die in one day)

Warning: Be very careful when you remove and install the new sending unit. It is very likely that the biodegradable wire harness for this which appears to include the oil level sender and starter has deteriorated and will need to be replaced at the same time. IIRC the wire harness is routed just behind the oil filter housing so you should check the condition of the insulation before proceeding. Mark