You need to put some paper or something under the engine so you can verify where on the case most of the oil is coming from like in the middle of the case or off to one side or another .  Does the oil come from the middle area where the engine is bolted to the transmission case ?   Oil cooler leaks not only drip on the ground but will show up on top of the engine case behind the dist. coming from under the fan housing . Be sure to clean off the bottom the case with some solvent ( brake cleaner etc.) so you can see better. Lay on the ground and watch while the engine is running. And yes you will have to remove the engine if its the cooler, crank seal, push rod tubes etc. Keep us posted.

Yup, sounds like the oil cooler has decided to spring a leak on you, Scott.  And, FYI, pulling an engine in an early (68-71) Baywindow bus is a bit of a chore.  Sorry, man.   :'(

I quit trying to fight the alignment issues, and, I think it was Jim who convinced me to pull the engine and trans together, then i do what i gots to do, and then put them back in together...  Easier, i think...

The VW shop manual tells you to pull them together.  I have done it both way depending how I felt that day and I had a coke crate close by.

Everyone says you should replace the transmission output seal and the crank seal (those are maybe 10 bucks together and they are fairly easy to pull out and put back in... getting the flywheel off can sometimes be a chore though) I would do those because they are relatively easy and cheap. The clutch would be the next thing to check. The manual should explain what to look for (seems like I remember that you can test the thickness with open ended wrenches). If the crank seal is leaking, the clutch disc might be toast.

I would make sure I have all the metric wrenches and sockets from 8-19mm, a torque wrench (if you do the crank seal), a 36mm socket and something to turn it (again if you are changing the crank seal), a clutch alignment tool or something to improvise with.

Make sure when you disconnect everything you label the wires (atleast the first time so you remember where they go!) Use a bolt(13mm head will fit)/drill big (1/4")/#2 pencil to plug the gas line. And the throttle cable is the one I ALWAYS forget...and then forget to fish back through the fan shroud as I'm putting the engine in. Support the engine on a jack while you are unbolting it. Then it slides straight back a couple inches and drops down. do your work on it and then reverse. Sometimes when pushing the engine back onto the trans shaft, you have to rotate the pulley to make the splines line up.

The first engine pull is scary but hard to mess up. I removed the body on my bugs before I pulled an engine. There's lots of help and once you do it, you'll realize that there's nothing to it.

Heres a how to: http://www.youtube.com/watch?v=gKF6dcKjLJo

Fantastic info guys. Thanks.

After reading these posts I feel much better about the job.

I have to admit I was a bit pi55ed when it started leaking but then I was reminded that this was why I bought a fixer upper to begin with. I'm all good now. 

More to come...

 Also remember that you are working on a 41 year old Van. You were about 4 years old when that Bus was born ?    To me your Bus is a late model