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engine oil leaking from bell housing 120-130

Check your valve cover with a straight edge. They get distorted when you tighten the screws down too hard onto a cork gasket.
There is absolutly nothing wrong with using the felt seals. They work well, are easy to fit and unfussy about alignment. Yes they can be less effective after many years running but new ones will seal like new. Fitting lip seals doesn't guarentee that you'll get no leaks. Thousands of Volvo engines ran leak free for years before the lip seal was introduced. Proper lip seals should have a double lip but these seem to be hard to find and so not used. I'll certainly be happy to use the felt ones next time I have to renew them.






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