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That chainsaw should leak oil off the bar. A small amount of oil flipping off the chain is how it is suppose to work. If it is a large amount of oil dripping from near the sprocket then you probably need to do some cleaning.
Remove the housing that covers that bar and sprocket. There are two plates on each side of the bar that set over the studs.They may be identical or slightly different depending on the saw but at least one of them will have a hole in it for the oiler. If you remove the bar and both plates you will see the oiler hole on the saw housing. This oiler injects oil through the plate and into a small hole in the bar where the chain picks it up and carries it around the saw. If this hole becomes plugged with sawdust it will keep your saw from oiling the bar proplerly. This hole should be cleaned out periodically. It's not a bad idea to remove the whole chain periodically and clean the chain guide all the way around the bar and get any sawdust buildup out so the oil can flow better.
These oilers are called diaphragm oilers and work fairly well when the saw is new with great compression. As the saw wears out, the compression drops and a side effect is less oil pumped. The diaphragm is replaceable and it's not horribly expensive. Most good saws use a gear oiler - and even the newer Poulans use gear oilers. The gear oilers tend to have less problems and don't rely on engine compression.
If you look under the machine by the chain you'll see a flat head screw (next to the sprocket) which controls the bar and chain oil flow . Try to turn the screw and check if there's any oil flow to the chain . If not you will need to replace the oil pump (part # 537 10 55-02 which will cost you about $35.00) Hope this help
Common problem with Poulan and Craftsman gas saws. Take off the chain and chain guide and clean out all the saw dust etc. Start saw without chain and look for port where there are signs of oil. If port is clear of sawdust, then it is likely the pump which is located behind the chain break assembly. you can get the diagram on Poulan website and the replacement pump will cost about $15 - $20 to replace yours.
You might try loosing the oil cap on the chain oiler filler cap to release any preasure that might have built up during use and is forcing oil out as it sits. It sounds like a simple fix but it might just work.
You can always put some penentrating oil in the saw oil tube by the bar, spray it in with the plastic straw attatched. Sometimes this will clean things out. As far as the tube being un attatched,,,, taking case apart is usually the remedy - kinda takes a while... :) Hope this helps you, Rick.
Remove the sprocket cover, bar, and chain. Find area where oil is discharged from case--is any part of the rubber seal damaged? Next, use compressed air to clean sawdust and dirt from oiler ports in rear of bar as well as the chain slot. Are you using motor oil instead of bar oil? Make sure there is nothing to prevent bar from making close contact with oiler port in case. Reassemble all parts and adjust chain tension.