Peter's writeup is spot on - good post. That's exactly how I repaired my upper timing cover leak and it's still dry 5yrs/25K later. One mistake people make is they try to beef up the upper timing cover seal by adding a layer of Loctite sealant with the U-seal. I believe this seal needs to "float" with the thermal cycling the engine experiences. Extra sealant will only hamper this function.

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95 E320 Cabriolet, 159K