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I have noticed a large leak of oil from an area of the engine that looks like a coolant connection. It is on the drivers side of the 2.0 engine block. See photo. The block is dry above and oily below. The photo mainly shows the coolant junction from where the oil seems to be originating....help?
 

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well is either not oil, not coming from that coolant junction or you have a hole in your head. there isnt really any way for oil to get in that junction. could be coming from the head gasket which is right below there or from the valve cover gasket right above it.
 

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From what I can see in this picture the valve cover gasket is perfectly dry - look at the u-shaped section of metal on the left side of the picture - thats one of the areas where the valve cover gasket connects to the head. A valve cover gasket leak would be seeping from all around the gasket for a while and the whole head would be oily, yours appears to be mostly dry.

Oil wouldn't be coming from the head coolant flange, if anything it would be a coolant/oil mix from a bad head gasket.

A bad head gasket is not something that happens overnight - your oil will appear to be "milky" when you change it. It gets progressively worse over time. If you see any signs of milky oil on an oil change you're either going to Craigslist for another mk3 or you're taking the head off. The valve cover gasket typically fails before the head gasket. I have 240k miles on my daily Golf and its still on the original head gasket - - I replaced the valve cover gasket at the first signs of leakage around 180k miles.

Take some better pictures and you'll get better answers, this picture doesn't show that much! :)
 
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