Suddenly Oil started running out from the back of the valve cover on my 1994 940 wagon. I can't see the exact location, but there is a cap (breather?) back there and it is coming out the bottom of that cap.

Any ideas?

You've got the fake distributor can at the back of the engine, with the 240-style front distributor. I have one of those cars too--they're not that common.

If you take off the metal can at the back of the engine, you'll see the thing that Mr. A. Roll has pointed out. Check flame trap to find out what the deal is--it probably needs to be cleaned. Either that or the plug just blasted itself out. I have never figured out why that big can is at the back of the engine like that. It doesn't look necessary unless it serves some function in crash situations. I can't imagine how much good that would do, being a stamped piece of sheet metal that is totally empty.
--
1992 940 wagon, very low miles
as well as others.

Hmm, MOST 940's have the distributor back there.
If you have the distributor up front, near the alternator (mounted in the normal location for a 240 engine) then you have a cap, called a Cam Plug in the back end of the head.
I'm going to go on the assumption that it's this. You can lose a LOT of oil from it when it pops out. Here's what you'll want to replace:
1378870 Valve Cover Gasket (B230F including Turbo's) $3.50 German

1336763 Rubber Cam Plug (B230F including Turbo's) $2.50 OEM

1389657 Plastic Flame Trap (Note: Turbo Models do not use a flame trap)
$0.50 Scan- Tech
3501707 Flame Trap Nipple (88-93) B230F,B234F $1.00 Scan Tech
(quotes from FCP Groton)
The breather / flame trap is probably plugged, causing your seal to blow out. The seal is just pressed in. It's thin metal with a rubber coating, take care not to deform it when installing. The valve cover area should be cleaned with carb cleaner, brake cleaner, alcohol or a similar solvent. I prefer to use blue or red silicone to seal the valve cover gaskt when reinstalling.

If you have the distributor in the back, I don't know what cap or vent you mean. More info please if this is the case.
===
Rob Bareiss, New London CT ::: 86 244DL, 87 244DL, 88 744GLE

Rob:
Thanks much for the diagnosis. The distributor is in the front, and you are accurate with the part about losing a LOT of oil. I think I am down 2 quarts from my 14 mile commute.

Appreciate it,
Jon Bush

Check to see if IPD p/n 2301 rear cam seal retainer may be aplicable to your engine. This is only an insurance policy, you will still need to maintain the flame trap.