My 1981 VW Camper 2.0 Litre Air-cooled also had a very bad leak before I
replaced the engine.

The large oil seal between the engine and clutch had failed and oil
seeped onto the clutch which made it slip.

I used to run the van by topping up the oil, a litre at a time, so I did
not have to do oil changes (not really recommended).

The engine finally failed as there was too much back pressure in the
sump causing a severe loss of power.

If you think that your engine is on the way out, then stop-leak may give
a temporary repair, though the leak may be too big for it to have any
effect.

Better though to sell up or save for a replacement engine. If the body
is rust free, then go for the new engine (also distributor and
carburetors) and have yourself many trouble free miles. The fuel economy
will also be better.

Beware of second hand engines unless you can get a good warranty.
Frank Woodcock