Is this a cracked block?
 

I was finally getting around to seeing if the parts 240D I bought was worth rebuilding the engine on, and was in the middle of cursing about how much harder it was to get the valve cover off and looking for a part I dropped when I saw the crack, that's the edge of the oil pan in the foreground. Guess seeing that saved me some wasted labor.

It looks like the upper oil pan is cracked from that nut being overtightened, probably from too much silicone or not evenly tightened.

Sure does look like the upper oil pan, which does mean the engine must come out to change it. Its not a bad job if you have a place to do it but not a cracked block anyway.

Like already stated - upper oil pan crack and engine has to come out to replace (easy job on the 240D:)). If this is on the '82 I have one of these upper oil pan sections in the shed if you are interested. It is in good condition with no cracks. I can email pics if you want to see it. Email me an offer and we will start from there.