I found the leak! I cleaned up my whole oil pan and found that the drip was coming from the oil level sensor. At least, I believe it is the oil level sensor. It is bolted on to the driver's side of the oil pan, the portion that sticks into the pan is a cylindrical shape. The leak was not coming from the o-ring that seals the aluminum body to the pan though, it was leaking from the small sensor that goes through the aluminum body. I tried to take the sensor out of the aluminum body but it wasn't coming easy and I didn't want to break it. My question is this; is there a way to remove the sensor from the body and get a new seal/sensor or do I have to buy the entire assembly with the sensor already in the aluminum body?

This is on my 87 300SDL with 167k miles.

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1987 300SDL 167k
1992 Volvo 740 140k
1990 Volvo 740 250k
1989 Volvo 240 269k

Anyone want to trade an old Volvo for an '87 300sdl?