dumb oil burning question

[dirtysocks]

I have an 87 300e it ritually burns oil from somewhere, which I can smell when the economy vent is on. My question is, why does the oil burn? It is mobil 1 0w 40 and it says that it protects up to 400 degrees fahrenheit. Now obviously the oil must be contacting parts of my engine that are hotter than this or it would not burn. However, the temp gauge never goes above 100 degrees celsius. How does it burn? Do certain parts of the engine get hotter than the 400 fahrenheit, possibly the timing chain cover? (appears to be the most likely culprit). Can the area around the oil filler cap get hot enough to burn off oil? I never see oil leaking from it but it appears wet to the eye, yet dry to the touch. Can I rule out bad rings/seals b/c I can smell it through the heat vents?

I don't know, I must be missing something here. Thanks everybody.