So after a process of elimination I finally came to the conclusion that the oil pressure problem had to do with the dented sump.
Since the sump had to come off anyway to install an oil temp sensor for the aftermarket Autometer oil pressure gauge, it made sense to do a proper job of it. Firstly I procured a good used sump from a 350SE at a wreckers, and installed the oil temp sensor and then gave a nice paint in lovely red engine enamel:
(Whenever you do a sump you put a new gasket and new bolts...)
Next we removed the old one which looked like this on the outside:
And this inside:
At this poiny I'm thinking a plastic timing chain rail has gone brittle and broken up at sometime in the past, but I also found chain links in there... they were blocking the pickup and gauze strainer. The rubber doodad on the bottom was so bad I bought a new one. All re-assembled it now looks like so:
The Oel pressure has gone from this:
http://www.youtube.com/watch?v=Yd7JjuGSpqQ
to this:
http://www.youtube.com/watch?v=XJC1OIY6iOM
Its not perfect Oel pressure but it is well within MB specs now (1.2bar at hot idle and it reaches 3.0bar at 1750rpm.
Next... compression test and roadworthy cert.
I.
Since the sump had to come off anyway to install an oil temp sensor for the aftermarket Autometer oil pressure gauge, it made sense to do a proper job of it. Firstly I procured a good used sump from a 350SE at a wreckers, and installed the oil temp sensor and then gave a nice paint in lovely red engine enamel:

(Whenever you do a sump you put a new gasket and new bolts...)
Next we removed the old one which looked like this on the outside:

And this inside:


At this poiny I'm thinking a plastic timing chain rail has gone brittle and broken up at sometime in the past, but I also found chain links in there... they were blocking the pickup and gauze strainer. The rubber doodad on the bottom was so bad I bought a new one. All re-assembled it now looks like so:

The Oel pressure has gone from this:
http://www.youtube.com/watch?v=Yd7JjuGSpqQ
to this:
http://www.youtube.com/watch?v=XJC1OIY6iOM
Its not perfect Oel pressure but it is well within MB specs now (1.2bar at hot idle and it reaches 3.0bar at 1750rpm.
Next... compression test and roadworthy cert.
I.