Oddly, the lift pump piston was stuck in place. I speculate that it was not pumping. I took it apart, polished in the inside and got it working well now.

There is zero leakage when pressurizing it with mity vac.

More to point of the mystery - I used lung pressure on the fuel hose that goes from the lift pump outlet side to the spin on filter with the return line to #1 injector removed. Guess what? It was very easy to push air through - probably 0.5 PSI. That easily could have been fuel being push through by a warm/pressurized fuel tank. The fuel does NOT have to go through the IP to reach the return line on #1. That line was over the top of the injector hole for several weeks.

A telling development that I think solves the mystery of the crankcase full of fuel.

Nonetheless, assuming the I did no other damage (TBD), I will check the oil level at every stop just in case.

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1986 300 SDL, gray on black, #14 head, 180K miles
1982 300 CD, silver on palomino, 290K+ miles [sold]
1980 300 SD, white on palomino, 500K+ miles when retired [uncle's car - inspiration for the above]