Bimmerdude:

I think you should relax. They may or may not have got the rear seal wrong. You don't know yet. Whatever it actually is, they are far more likely to be able to determine it than we can on this board. You have a warranty. What is all the drama?

The rear seal was the original diagnosis. It may have been leaking and been diagnosed correctly, but it may not have been the only leak. Also, it might still be leaking, depending on the condition of the crank where it contacts the seal, and the quality of the repair. Or, maybe it was never the problem. You are assuming the latter, but that is not necessarily a safe assumption.

If it is showing higher up, it could be thrown there, or it could be leaking there. If it has been leaking for a while, the area will all be oily and it won't be obvious where it is coming from. Using the dye sounds very logical to me, not sure why you wouldn't want to know for sure prior to randomly replacing seals and gaskets. Let them do it.

If many parts have been replaced, and there is a leak, it is more likely that it is a leak from prior workmanship than a part defect IMO. We can tell you what parts are likely to leak (oil breather, cam seals, etc) but not about the work that was done previously since we just don't know.

You say it is oil, but many posters here are questioning whether it really is, since other fluids can pick up oil as they drip down and often appear to be oil. We just want to be sure, and I don't know how you know for sure it is oil.

I would suspect the head gasket, or valve cover gaskets. You can't test for either, you have to find out where it is leaking. There is also the possibility that there is enough oil around the rear of the engine that you are seeing residual drips, and not a continuing leak. I don't know how long it has gone on for but that is a possibility.

My final advice is to let the mechanic do the search. If you don't trust them at all, then simply take your vehicle away, that is your choice. You do risk creating liability in that case, however, if one mechanic left something undone and another shop finds it. Who pays? Likely you unless/until they accept responsibility.

Good luck

Jeff

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2007 X3 3.0si, 6 MT, Premium, White

Retired:
2008 535i, 6 MT, M Sport, Premium, Space Grey
2003 X5 3.0 Steptronic, Premium, Titanium Silver
2002 325xi 5 MT, Steel Grey
2004 Z4 3.0 Premium, Sport, SMG, Maldives Blue