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Does it make sense to try to stop a leaky head gasket on an older engine (don't know when or if the head gasket has ever been replaced) by tightening the head bolts a bit? Looks like crankcase oil is leaking on the front side from the head gasket.
 

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No. That is the ubiquitous sign of a bad head gasket.
Can be caused by failure of the cooling system and or grins and giggles.

Replace it. You will have to use new bolts as they are not re-usable. I strongly recommend that you
get Studs instead of bolts as they 1. Are re-usable from here on out. 2. Hold tighter.

First time you did it, I would invest in replacing the Water pump as well as the Timing Belt and Tensioner.
Why as you are going to have to re-time it again, TIMING IS VERY CRITICAL TO DIESELS on tooth off and you ruin the engine/head/your day. When Retiming it you have to turn it over by hand about 8 times to insure you have no binds.
If while you are spinning it by hand there is any bind,,,,DO NOT FORCE IT. These are interference engines the Valves can com in contact with the pistons.

To determine the gasket that you need, on the front of the engine (grille side) on the head you will see in the center a oil scupper bulge. To the left of that where the block and the head meet, you will see a head gasket part with notches. Count the notches and get the same notched gasket. 3 is most common.

When you need more specifics on timing come on back and we will assist you.
 
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How does the oil look on the dipstick? And how much oil would you say is leaking? Sounds like the car is still driveable.

Depending on how much oil is leaking, you could just do like I do, and make sure to keep a closer check on the oil level, and just keep driving it.

The proper response is of course to fix the head gasket. If yours is anything like mine though, then it isn't leaking that much. To me, right now, it's not worth diving into. I just top off a quart every 500 miles and keep on - keeping on

Other advantage to this is never changing the oil. As it is slowly being changed over the course of time anyway:) Just change the filter every 7500 miles
 

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I found this thread when searching for my similar problem....I have a 1981 1.7l gas engine rabbit and it's leaking from the gasket in the front center area just left of where the gasket sticks out a little from the head. It's definitely not the valve cover gasket, the head surface is spotless. I've recently cleaned the engine bay and changed the oil (just bought this pickup from the son of original owner), and decided to use 0w30 synthetic oil. Is this making it leak more because the oil is so thin?
I don't smell any oil in the exhaust and the coolant is clean.
 

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0w30 synth is too thin for a diesel that has had its life run on Dino Oil, I would say switch it back over to 10w30 cc/cd dino oil and see if the leak doesn't stop in a few days. If the leak persists then I would be thinking a head gasket is in your future.
 

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Be certain it's not leaking from the valve cover or oil pressure sensor.
Know that a leaking head gasket on that engine WILL get worse, and always leave a mess wherever you park.
Also that leaking oil often spreads onto and damages other things like the transmission mount and shift bushings.

If you do the HG, just get a regular fiber gasket
Hylomar M Aerosol Spray Version - 200ml - 61311 | eBay
Do get the ARP head studs ARP-204-4701
 
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