Geronimo;
I don't know if it's the same thing but I did experience something last
December.  I had been seeing some oil beneath where my vehicle was
parked but didn't do anything about it for quite a while.

Then one day while stopped at the mailbox with the engine idling, I
think something like the temperature or oil gauge alerted me to the
fact that something was amiss (the only time I check fluid levels is,
well, never) .

In any case, the oil level was *really* down so instead of going to
town I went home to pour some oil in. Much to my surprise it was
running out the bottom at the rear of the engine almost as fast as I
was pouring it in.

"Oh oh" I thought to myself. "I've finally killed old Olaf". (a 1985
245 GL)

I had it towed to my neighbourhood garage thinking that it was the last
time I'd be seeing Olaf before sending him to Valhalla.

It turned out to be the rear cam seal. $5.71 for the part.

The mechanic fabricated a bracket to hold the seal in. He said that
with older vehicles, there is often sufficient blow-by to blow a seal
out and the bracket was a preventative measure to avoid my having to
return the vehicle to him to replace the seal again. Sounded reasonable
to me so I told him to go ahead.

2 hours labour in total for diagnosis, R&R of the seal and bracket
fabrication/installation. Less than $200 for the whole episode.
Relatively painless and a massive relief to learn that Olaf survived
yet another of my slothful vehicle non-maintenance habits.

Gotta take the transmission and the clutch and the flywheel out. Or the
equivalent in an automatic. Major pain in the a for what is finally a
trivial bit of work. Might try some of the "seal swellers" they sell,
or a switch to some of those oil for old engines they sell with seal
swellers in them, although yours sounds like a fairly serious leak. I
did the same for a much slower leak on a 240, with pretty good results.
The parts guy actually had a book to look up which seals on which cars
are rubber and will respond to the treatment, and which are rope type
seals and won't.

Tell the mechanic it's dripping oil and let him track it down, or get it up
on ramps and crawl under there to see.

Start with the crankcase ventilation system. If the ventilation isn't good,
it will force the oil out everywhere possible. In extreme cases it has been
known to pop the rear seal out entirely. An interesting point: the oil level
is below the bottom of the rear seal.

Clean and check all the parts of the ventilation system - the oil-air
separator, the flame trap (if present), even the hoses. I had a hose that
was plugged with deposits... and those are big hoses! I just never thought
to check them. I lost 3 quarts of oil before I got to the next freeway exit.
Anyway... when you are done, you should be able to remove the oil filler cap
and blow through the hose into and through the engine with about the
resistance of your lips when blowing a candle out.

When the ventilation is drawing a slight vacuum in the crankcase as it
should, oil won't leak out of even a bad seal.

Mike