I recently bought an 84 300SD, and well... its nice to buy another POS to fix up and make all nice again.

My issue is that the oil level (as shown by the dipstick) changes drastically when I check it several times a day. Sometimes it says I am OK, halfway between the two marks, then an hour later, it'll be at the lower limit, then another hour later it'll be four inches above the top mark. Any Ideas?

On a somewhat related note, could this be a sign that the oil isn't getting pumped around like it should? On my 300D, I noticed that there was something gunking up the oil nozzles (don't know what you would call a pipe with holes in it) that spray oil onto the cams, which scared the crap out of me. My crazy neighbor (obviously a trustworthy source of car information, I know.... ) recommended that for the 300D, I try putting in some ATF, let it run for a few minutes, and then do an oil change. He believes the high detergency of the ATF would break up any clumps/gunk that might be plugging stuff up. Is this an acceptable practice?
Thanks everybody!