>I have a strange problem with my newly purchased 1986 Vanagon - 

heh.. heh.. heh.. what makes you think it's strange???

>The engine leaks coolant from the bottom of the passenger side cylinder

See what I mean, perfectly normal behaviour!!

When the engine cools down all that aluminium contracts, allowing the old
hard rubber gasket to get a good rinse off.  Change the head gasket, buy a
proper $100 kit, use some sealant goop, and if it is the left (driver) side,
throw in a new waterpump for good measure.  This can all be done without
removing the engine, quite spacious in there, once the FI manifolds, coolant
lines and exhaust system are out of the way<g>.

   Or you may wish to re-torque the head bolts as a first try.  Might slow
things down a bit.

        Only leaks when parked on an incline???  hmmm...just how much
coolant do you actually have in there, check the main tank in the engine
compartment, and check if hot air comes out the front defrosters and floor
or just floor.  If no heat to the windshield you have a big airbubble in the
system  If you are making a puddle each night you are also making an
airbubble in the system, this is bad news in a Vanagon, you can lose engine
cooling really fast if the pump starts scavenging air instead of water.
Tim Smith