Dale

The 78 530i oil housing & canister was so troublesome, I'd crack looose the thru-bolt, then remove the four hold-down bolts, and take the canister/housing assembly to the bench for clean-up and install of a new filter & o-ring.
Then install and finally give last torque to thru bolt. Care should be taken to assure the internal spring and cap plate didn't ge tossed out with the filter.

It's a fairly close fit between filter housing and motor mount & bumb-stop. When the motor mounts sem squished out, change them.

The main cause for o-ring leakeage is double o-rings. If upon filter change, the old o-ring stuck up into the housing instead of coming off on the lip of the canister, then a new o-ring goes onto the canister, there will not be an adequate seal between the two o-rings. Sometimes you can drive for hrs, days......then it'll let go. Replacement of the found o-ring will only get repeat failure. It's difficult to see the o-ring up in the housinng. Use a mirror on-a-stick.
Never re-use an o-ring.
If there's any deformation in the housing, or canister, no new o-ring will seal it.
I frequently saw the steel type canisters badly bent.

Commonly there were two types of o-rings. Flat ones, and round ones. I've had much better performance with the round ones. Be sure the o-ring is for a 78 530i, not a 80 528i. It should go into place wiout being streched, or compressed.
Thinner oil is definitely needed. An oil pressure test is called for when the engine is hot and running OK. If it's still above spec, tha by-pass valve (pressure metering device) is in need of work.

Dan Patzer the CyberWrench from BIMMERS ONLY 72' tii touring K75RT 85' 732i R1100GSA R850R http://www.nwlink.com/~bmrfamly/ 425-259-3601 O.E.M. parts, Independant service since 1967 12724 Marine Drive, Marysville, Wa. 98271

> Thanks for your prompt response.
> I use castrol 20-50 year round. the low temperature in the garage never gets
> below 35-40 F.(n. CA) I did use a factory filter. In 5 years this has never
> happened before. It sure felt as if the housing seated properly.