I would guess a worn camshaft for the reasons you stated -- poor practice would have come back repeatedly on this repair!

The cure, at least temporarily, will be to leave the seal somewhat proud of the case rather than seated all the way down unless there is a deep lengthwise scratch or gouge on the camshaft, in which case you will have to live with the leak until you replace it, the oil will leak down the score no matter what the condition of the rubber seal lip.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!

Ummmmmmm.....

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Well, some good news. My shop installed another new camshaft seal (for free) and so far - no leaks! It has been three days and I've done some heavy driving and so far it hasn't leaked.

So, fingers are crossed...! Thanks again for all the helpful suggestions!

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Chris
2007 E550 4Matic - 61,000 Km - Iridium Silver, black leather, Sport package, Premium 2 package
2007 GL450 4Matic - 62,000 Km - Obsidian Black Metallic, black leather, all options
1998 E430 - sold
1989 300E - 333,000 Km - sold
1977 280E - sold
1971 250 - retired

"And a frign hat. They gave me a hat at the annual benefits meeting. I said. how does this benefit me. I dont have anything from the company.. So they gave me a hat." - TheDon