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Based on probability, you either have a faulty oil filter which is not sealing properly, or there’s a crack or some other flaw in the boss (fitting) on the side of the engine that accepts the filter. Chances are the oil appears when the engine is cold and oil pressure is highest. The oil pressure (which all engines need to survive) is pushing the oil out through the weakest part of this assembly.
It’s not unknown for oil filters (especially cheaper brands) to have basic manufacturing flaws that allow them to leak, so that’s where I’d start my investigation.
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I’d say that you’re absolutely spot on that the rising level on your engine’s dipstick is caused by diesel getting into the sump. At this point, you have a problem because the diesel will be diluting the engine oil, meaning it won’t be lubricating the engine parts as well as it should. Leave it unchecked and eventually you’ll damage the engine internally.
There are a couple of major ways for this dilution to occur. Firstly, a worn, damaged or stuck fuel injector can dump excess fuel into the engine. At this point, the engine can’t burn it all, and some finds its way past the piston rings and into the engine’s sump.
The other common way for this to happen is when the vehicle’s Diesel Particulate Filter (DPF) becomes full of soot and needs to regenerate (clean itself). If you haven’t been driving at highway speeds for a while, the exhaust system may not have got hot enough to force this regeneration. At that point, the computer will inject extra fuel into the engine to make the exhaust run hotter. And, again, some of this excess fuel can find its way into the sump.
An oil change is your best plan of attack, and then keep a close eye on the level of the dipstick. Any increase in level should not be ignored.
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According to the information I have, the final drive ratio on this vehicle was 4.3:1. That means, for every revolution made by the wheels, the driveshaft (which links the transmission to those wheels) has to turn 4.3 times.
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