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The oil seal that everyone is talking about is the one the shaft of the water pump goes through where it hooks up to the oil pump.
True, there is a new seal that is installed on the pump, but the oil seal is pressed into the engine andit can be a slight pita to remove. That is the one that more than likely needs to be replaced and is allowing oil into the water cavity.
It is also very easy to bugger up the seal lip when putting the pump back in. All it takes is a tiny nick on the lip and oil can come through. When you put the cover back on, be sure to put some grease on the end of the water pump shaft and make sure you have sanded off any sharp edges or burrs on the water pump shaft. Also be careful to put the cover back in as straight as you can so the pump shaft won't put too much sideways stress on the seal lip.
Hope this helps.
Jim(inSC)
 
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