This problem seems to happening on the M271 motor's (2003-2005 C230) at about 50K miles, just after the warranty expires. What happens is the cam sensors leak oil were the wire goes into the sensor, then the oil travels down to the O2 sensor and kills it. Before you get stuck with a big bill, if your car is still under warranty, pull the plastic cover off the engine and check the connectors as shown in the picture above for the slightest trace of oil and if there is, get it fixed under warranty. There's a TSB on it. If it's out of warranty, replace it before it gets worse.
If oil gets in the harness and damages the O2 sensors, not only do you have to replace the O2 sensor but that entire section of wiring harness, not cheap. Prevention is the key and even getting new sensors doesn't solve the problem, just pushes it out another 50K miles, hopefully.
Also, MB has a harness that is supposed to prevent the oil from getting in the rest of the harness (see pic below). This does not prevent the new cam sensors from leaking, just controls collateral damage.
