Big car problem

I would say that the problem is in the engine heads or head gaskets, which is a major repair, but if you took to a good shop they could quote you an estimate on the repairs so as to be able to make a good decision for fixing or to trade in for another car. This problem is very common in cars.

Your are talking about a $2,500 repair. I am not sure if you car worth that match.

Head Gasket is gone. You will need new gasket kit and the head skimmed a good back street garage will do it for around £200. well worth the money these cars are the last of the over engineered Mercedes I have had mine for 4 years and only ever had to replace the exhaust

This is a 7year old question but for people looking for an answer, it could be 3 options. O ring in the front cover gasket or a bad transmission cooler (water will be a pinkish color.)