I went to look at a used 2005 S2K with 35k on the odometer and found that the head gasket seemed soaked in oil. There's even a small section near the front of the engine block that has collected some oil. Dealer says that the engine has passed a compression test and reported no engine problems. Engine bay looked free of oil otherwise.

Does anything look out of place here?

I've seen a couple posts that say the front of the engine block is built from porous materials so some degree of oil leak is normal, but I don't think that fits the bill here.

 

I think you're pointing at the VALVE cover gasket, very different from HEAD gasket. Head gasket would be below the metal chunk that its leaking from. Valve gasket is very very easy to replace - just a day of work if youre a noob +gasket and it will be fine. Actually it wont cause any problem other than needing a real little bit of oil to be added in every so often (you wont notice since its suppsoed to consume oil anyways) + a slightly dirty engine.


edit-
just saw you said the HG seemed covered in oil and theres oil in the front. I was talking about the oil in the front. If you know what/where the HG is, I take it back. BUT if you were talking about that gasket being 'oily' its fine.

also, the HG shouldnt be leaking oil, since the HG only sees WATER. The coolant runs around the HG so if it were a HG leak, it would be of coolant/combustion gases.

 

you'll be fine..when i picked mine up, it was leaking from that allen bolt just right below the vavle cover..but im not too worry about it...after all the help i got from this site i know what's causing it..a simple O-ring replacement

 

There are several issues that occasionally result in oil at that point. A small leak from the gasket, bolt, or seep through the head as porous casting in that area is common. The timing chain galley is behind that spot, not the head/block interface so it is not as critical as first glance may indicate. Most just clean it off once a year and ignore it.

 

Thanks folks!

The oil I saw was around the highlighted area in red which is the valve cover gasket (ie, immediately below the red valve cover), NOT head gasket. So things seem to be fine.