I have had my 91 240 for two years now and the oil light has been on since I bought it. A few months after I bought the car, I noticed the cable to the sending unit was not plugged in. I plugged it in and the light came on. I replaced the sending unit, changed the oil and filter, and this did not fix it. I figured that the previous owner unplugged it since there is seems to be nothing wrong with the car and it runs great. I haven't done anything about it since I figured that it couldn't be the oil pump because it has been running perfectly fine for two years. I recently installed a tachometer and I noticed the light goes off as soon as I hit 2500rpm. I was wondering if anybody has had this problem or if anybody had any idea what the problem could be.

 

You obviously have low oil pressure. When engine is revved up the pressure rises and this makes the light go off. You may have a bad oil pump or generally a worn outengine-not good! The car "runs great", but you are on borrowed time...

 

Thanks a lot for your input. I appreciate your help. I actually called the dealer a few weeks ago and they told me it could be a worn oil pump o-ring. Does that sound like something that could cause this problem?
I highly doubt there is anything major wrong with the engine. The engine idles very smoothly, it accelerates very well, the fuel efficiency is 27mpg city+hwy combined, there is no shaking of any kind, I change the oil every 2500 miles and there has never been any metal fillings in the dirty oil ( I check every time). I have also checked the spark plugs and none of them are damaged or looking abnormal, and I passed emissions with really low numbers.

 

I have seen many oil pumps not sealed correctly and have the same problem.