Oil Blowing Out of Dipstick Tube

There is oil pressure inside of the engine. Do you recall the old days when every car had a oil pressure gauge on the dash board? Nowadays, a light comes on when the oil pressure is low. So if the oil dip stick is not secure the pressure of the oil in the engine (when the engine is running of course), will force the oil out of any low pressure area, in this case the dip stick tube.

It is likely caused by blow-by, be sure the oil level is not over full as well. It is a possibility the PCV Valve is not working properly and causing the pressure buildup as well, replace the PCV Valve first. This also may be caused by Blow-by that is caused by broken or stuck lower compression rings in turn causing the pressure to build up inside the engine, if replacing the PCV Valves doesn't stop it then get some top engine cleaner and remove all spark plugs and poor the whole can of fluid inside the spark plug holes equal amount to each cylinder, let it sit over night (spark plugs left out).

If you have excessive air forcefully coming out you dip stick, it's "blow by." I bet if you take and crack open the oil fill cap it would make a mess blowing oil all over too. Now all engines have some degree of blow by. Here is some of the possible issues, 1. Worn rings on one or more cylinders. 2. Values (intake and/or exhaust) not seating good in the cylinder head.

Best think you can do is a cylinder pressure check. I think you can get a loaner from one of the auto stores or just buy one. Get you a Haynes and Clitons for your vehicle. And it will tell you how to do it. I say get both books/manuals as the both have better topics, graphics that the other leaves out

With the turbo VW another check is a leak in the seal on the turbo. I had a Mercedes that leaked exhaust back into the oil through the rotory seal beteen the exhaust side of the turbo and the oil that cooled that area.