Marcus, I've seen this problem a couple of times and it has never "cured 
itself". First, be certain it's engine oil. If you just rebuilt the motor, 
that's probably a good guess. I think your hunch that the main seal is shot is 
probably correct, but I bet its because (1) the seal was not install correctly, 
or (2) the gland nut was not put on tight enough. Number 2 is more common, IMHO.
You've got to torque that baby to 200+ (252, I seem to remember is the official 
number) ft-lbs. Otherwise, the flywheel loosens up and ovalizes the dowel pins, 
wobbles and breaks the seal. I've been through this, and its not a pretty site.

Erik

In message <199503021713.RAA27268@rowan.coventry.ac.uk>  writes:
> Dear list,
> 
> My housemate rebuilt his 1600 dual port, which he has put
> about 500 careful miles on. It was rebuilt with alot of care
> and purrrrssss as it goes, but (the big but) yesterday
> a load of oil appeared to be working its way out of the bell
> housing. 
> 
> This could be from the oil seal behind the flywheel,
> but the engine oil is still a pristine green (on the dipstick) and 
> the stuff being dropped is black. Could this be clean engine oil 
> picking up clutch dust on the way out (would surely lead to clutch
> slip?) or is it more likely to be from the gearbox?
> 
> Assuming it is the engine oil seal, we've checked the oil 
> breather is ok to make sure that the crankcase pressure isn't 
> forcing the oil out past the seal, and apart from that we are pretty
> lost as to what may have caused the seal to fail at such a low
> mileage. The local vw garage guy said he had had a similar problem
> on an engine he had rebuilt and the oil leak had cured itself!
> 
> This isn't really something I can count on, so any ideas anyone????
> 
> cheers
> Marcus
> '70 bus
>  
> -- 
> __
> Marcus Grant
> mty016@uk.ac.cov

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