If there is oil in the distributor, the cam seal is leaking. If not, the rubber seal for the front cover is leaking.
The grease is ONLY to allow the cover to slide over the seal -- it must be "dry" to seal after installation. One of those engineering oddities one finds in MB engines once in a while. Why not provide a flat in there instead of a rubber seal?
Did you put the cam seal in right way round? That is, taper side in? The pressure on the lip should press it onto the cam to seal it, not allow oil to be pushed back out. Easy to get backwards, it fits both ways, unlike the front main seal that has a flange on it.
It is also possible to cut it if there is a sharp edge on the cam somewhere -- if it is leaking, take a look, you may want to take a file and smooth the slot, all sides, where the distributor connects. A burr here will take a nip out of the seal where it touches the cam during installation, and it will leak.
At least you don't have to do major disassembly of the distributor to fix this -- the seal on the Volvo four cylinder is behind the drive dog -- I bought an extra at the dump it was so hard to get off, I was sure I would break something!
If that's the only problem you have, you are doing better than we usually do! We took one transmission apart three times before giving up and taking to the tranny shop (no second gear!) -- the previous idiot had taken the slip rings off the stator support and hadn't replaced some of them! I'm not sure why I and my brother both missed it, but we did.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!
Last edited by psfred; 12-09-2001 at 06:14 PM.