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The yellow paste forms under the valve cover. It is a mixture of condensation and oil mist. Condensation is normal, it will always happen with stop and start cycles that cause the engine to be warm, then cold. The humidity can be just from the atmosphere. Normally the engine gets hot enough to burn off the condensation; problems happen when you have too many short trips and the engine doesn't get hot enough to burn it off as it is designed to do, so it collects and forms the paste. The vented fumes travel from under the valve cover down to the CCV system, where the oil separator separates out the oil mist, and returns it to the sump, with the cleaner air being returned to the intake tract. Only thing is, the separator is designed to separate out liquids, not the paste, so the paste collects there. But it comes from the top of the engine, under the valve cover.
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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
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