Engine trouble- Plummeting oil pressure

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UPDATE 1: So I drained the oil and pulled the valve covers. Nothing weird under the valve covers. The oil did seem less viscous then it should but I'm no expert so I'm not really sure. The thing that did surprise me is that the oil smells like gasoline pretty bad. That leads me to think valve seals or head gasket maybe? Also is there any good way to check the oil for shavings? Maybe running it through some kind of filter? And is there any good way to cut open the filter? Aside from using a tool specifically for that.

It's not synthetic but I will keep that in mind.
Just pour some of the contents of the filter onto a white paper towel (letting it run off the side is OK). Let it sit for a few min, then examine with a flashlight or the light from your phone works well (take a flash picture and examine is even better because you can zoom & the flash highlights metal specs). If there is metal you will see little reflective thingys on the paper towel.
 
Just had this same thing happen in my 340- when I drained the oil it was like water and smelled like gas. Changed the fuel pump and oil/filter and it was fine.
 
Blew the pan and valve covers off a 6 pack with gas in oil
Finished garage- BIG MESS but no fire (lucky)
Nitro is worse
 
Blew the pan and valve covers off a 6 pack with gas in oil
Finished garage- BIG MESS but no fire (lucky)
Nitro is worse

I would not believe that if I hadn't seen it before. Back in the 80's a customer of mine raced a boss 302 ford tunnel ram engine and they were in the pits after a run and he left the fuel pump turned on and walked up to the stands. A while later he went to start the motor and boom, he said there was flaming oil all over everyone's car around his and his was on fire, then came the fire extinguisher white powder every where. The next week when I walked into his shop I seen the oil pan and 1 valve cover with all the bolt holes ripped out and he said he never found the other valve cover.
 
Dang, I am glad nothing blew up!

UPDATE 2: I replaced the fuel pump. The old one had some visible cracks on the diaphragm but they didn't look like they went all the way through. I also pulled the top off the carb and checked the needle and seats. Checked the floats too, they seemed fine. Didn't see any metal in the oil or filter. Fired it up and had 40psi oil pressure. Haven't taken it out yet but I am thinking about running it for 20 minutes or so and keeping an eye on it before I drive it.
 
You are lucky..........maybe.........Consider "has it run" long enough for bearing damage due to lack of lubrication?

As others have said.........blew the covers off. Seen that, years a go
 
I would not believe that if I hadn't seen it before. Back in the 80's a customer of mine raced a boss 302 ford tunnel ram engine and they were in the pits after a run and he left the fuel pump turned on and walked up to the stands. A while later he went to start the motor and boom, he said there was flaming oil all over everyone's car around his and his was on fire, then came the fire extinguisher white powder every where. The next week when I walked into his shop I seen the oil pan and 1 valve cover with all the bolt holes ripped out and he said he never found the other valve cover.
There is always bright side to these stories.... you have the stories to tell. Hope the OP's engine is all god now.
 
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