Ouch, 4 years and counting! Sorry I can't suggest a fix for the high NOx reading, but if you're still wondering about the EGR, your '89 M103 did NOT come with EGR or air pump. Those were added beginning MY '90, even in CA version cars.

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1988 California version 260E (W124)
Anthracite Grey/Palomino
Owned since new and still going strong and smooth
MBCA member

Past Mercedes-Benz:
1986 190E Baby Benz
1967 230 Inherited from mom when she downsized
1959 220S Introduced me to the joys of keepin' 'em goin'

There are only 10 kinds of people in the world--those who understand binary and those who don't