My '83 240D leaks in the same place, as well as around the oil filler cap. The service advisor at the dealer said it was probably a case of blow-by causing excessive pressure in the crankcase.

The tubes going to and from the oil separator are in pretty bad shape, anyway, and I suspect the O-ring underheath it is as well. I'll get around to replacing those as soon as this semester's over (about 2 weeks).

Is the oil separator something that needs to ever be replaced? Can it become clogged or otherwise contaminated? Is there a reasonable way to test it?

Thanks.
- Nathan
'83 240D, 250k miles