From what I've gathered, head gaskets and valve cover seals are a popular problem with my car (w126 116.696 engine)

Headgasket is about an $800 job, which usually requires heli-coring the threads of the block.

It's Fuel injected via the Bosch K-jetronic injection system. I also forgot to mention that the o2 sensor looks to be original, with 137,000 miles on it (it's rusted on, I couldnt get it off)

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-1983 VW Rabbit LS Diesel (5speed, VNT/Giles build)