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Originally Posted by samiam4
Sharvey,
Since you have a M104 engine- It is apparent by the responses that the sign of needing a headgasket is oil in the coolant.
The external oil leak is probably the front cover needing to be re-sealed which is not very expensive.
To the list: So you guys don't consider a M103 headgasket leaking oil externally as a "head gasket failure". Only when there is mixing between coolant and oil?
Michael
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If you have a leak in the rear corner of the engine, it's the head gasket. If you plan to keep the car for any length of time, I'd have it repaired before it gets worse. If you get to the point where there is oil in the coolant, you will have to add the cost of a coolant system flush not to mention any other possible problems that could arise.
Make sure you have it done by a highly experienced person/shop. If they don't do it right the first time, you will just have more cost and grief down the line. When they have the head off they should replace anything that's difficult to get to like the serpentine belt and the short hose between the head and the thermostat housing.
Done correctly, you will not have any more problems. I believe they changed the head gasket to correct the problem.