If you are having a problem with the alarm beeping at you on your Merc and you know it has oil in both tanks, here's a step-by-step to diagnose the problem. First of all, run the engine on a remote tank of 50:1 just in case you DO have a failure.
Run the engine to recreate the conditions sounding the alarm. Do these tests while the engine is running and the alarm is beeping. Be careful- the flywheel is very close to your hand. Keep sleeves, watches and other objects that can catch on the flywheel away. Once the alarm starts, I would first unplug the blue wire from the oil reservoir cap. If the alarm stops, either the oil level sensor is bad or the level is low.
Next I would disconnect the green wire going from the alarm module to the #4 coil wire terminal on the switchbox. If this stops the alarm, either the rotation sensor is bad or the pump isn't rotating. If the alarm does not stop reconnect the green wire and unplug the white and blue/white wires to the rotation sensor. If this stops the alarm, check for no spark on #4 cylinder. If the alarm does not stop disconnect the green, white and blue/white wires. If this stops the alarm, then either the pump is not rotating, the rotation sensor is bad, or no spark on #4 or the alarm module is bad.
If the alarm still does not stop, disconnect the solid blue, blue/white, white, and green wires, if this still does not silence the alarm, then the alarm module is bad. You will single out a bad component in each step, eliminating each item as you go. You can check the rotation sensor by checking its output. Turn the key on, leave power wire connected and rotate the engine. You should get 1 pulse of 5 volts for every 2 rotations. You'll need to have the plugs pulled for this test so you can turn the engine safelt and easily.
