Hard to tell. Normally the system pressurizes to the valve but if the valve is leaking even a little you'll loose all your oil. Also if your springs are a bit tired the valve my be in the open position more often than not. My guess is that probably the valve is OK but is bleeding off some of the pressure to the return line. Worst case you'll eventually need to rebuild the valve but from what I understand that's a pretty straight forward and not horribly expensive job. At idle the pump puts out a steady flow but not high pressure (at least not at the rear valve bleed screw). My guess is that if you patch/repair the return line the rest of the system will be OK. You may be able to cut out the leaking section where you have room to add fittings and patch with a braded brake line. A good brake shop should easily be able to handle it. Just be sure to tell them NOT to add brake fluid, they might not know any better.

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LRG
1987 300D Turbo 175K
2006 Toyota Prius, efficent but no soul
1985 300 TDT(130K miles of trouble free motoring)now sold