SOURCE: Oil leak
the round oval shaped object in question should be the canister where your oil filter goes ,yes there is a gasket on the inside that may have been broke or left off on your last oil change
SOURCE: need cylinder head gasket torque specs.
looks like there is special sequence to reassemble and tightening, a quick note replace any bolts that have two punch marks.tighten as follows: x x x x x 10 4 2 6 8 x x x x x 7 5 1 3 9 torque all down to 15 ft lbs torque to 30 ft lbs plus 90 degrees. Good luck!
SOURCE: 1991 Daihatsu charade, 3 cylinder, manual, engine
I had this problem too. There is a restricting jet hammered into the block to reduce the oil flow to the head and increase the pressure to the main bearings, so the only place the oil pressure is higher than the water pressure is in the block. Apparently this is a known problem with the 3 cyl CB engine. The block is cracked. Greg
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