Oil Leak

Tom the O-ring does not seat against the block nor is there any gasket used to seal the dist. The O-ring seats into a groove on the dist. housing and when the dist. is installed the O-ring ends up down inside the block a little so there's no possible way the crack or broken chunk in that picture can cause a leak at the dist. unless it's broken completely through the block, which it doesn't look like it is. I apparently didn't catch the issue involving the oil pump driveshaft but it sounds like you had to replace it. If it is too long it can hold the dist. up so that the O-ring is not seating down in the block.

I attached a picture of a dist. I sold a while back. It's not a close up of the O-ring but if you look closely you can see the O-ring seats into a groove.

Numerous time in the past I've seen the dist. blamed for leaking when it was actually a leaking oil sender unit. It's right next to the dist. so if it leaks oil ends up in the same area. You might want to check that.

Tracy, I do understand what you are saying regarding the O ring seal that sets in the groove around the dist. and how it sets against the sides of the opening in the block. the chip in the casting around the block does not extend through to this area so the dist MUST be leaking around the base due to not seating down properly. I have taken off the sender at the tube for the gauge and have used liquid Teflon on it so I am 99% sure it is not leaking at the sender. The intake manifold by all indications looks to be sealing well also at the base of the back edge where it meets the block. That only leave the dist not sitting flush in the hole in relation to the shaft. If the oil pump shaft is the culprit than how could I go about getting the dist to sit flush. Example: I know the oil pump shaft is down as far as i can seat it into the pump and it is meshed into the camshaft gear, and I know that the slot is into the grooved hole in the oil shaft but the larger shaft on the distributor is "bottomed out" against the top of the oil pump shaft and the dist is twisted into the gear and is still sitting too high so as not to seat down flat against the block surface. What could i do about this? because I am starting to believe that this is the cause of the oil leaking. There is defiantly a leak at the dizzy and it kind of seems like this may be the cause of it. I tried to pull the oil pump shaft out using a large flat bladed screwdriver but the antenna magnet I was trying to pull it out with does not have enough power to hold the shaft as i pull up and it lets go and drops back into the spline. i tried two magnets and still no success in pulling it out.