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Subaru 360's don't have valves. They are 2 stroke! Also, since they are 2 stroke, they don't have oil in the crankcase either. Are you sure it's oil? Is the line from the oil pump hooked to the crankcase or the carb? Was it running before and just started doing this? More info is needed.

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There is an oil check valve on the 360. It's at the inlet to the oil pump. They leak. It's just a ball and spring. You can take it apart, clean it and stretch the spring a little. It might help. I haven't had much luck with mine, even cleaning and stretching it. When the car sits for a long time, a lot of oil leaks past the check valve and it smokes like an active volcano for about 10 mins. If I drive it everyday it's not so bad.

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It's part of the oil pump. There's a lever coming off the side of the pump with a cable attached to it. The cable can get stuck wide open if it's not adjusted right.

 

If you are working on a 360 that's been sitting around for a long time, it is going to smoke bad, not much you can do about it. It will keep smoking until you get it out on the road and drive it hard, as in wot, for a few days to burn all the old oil out of the engine and exhaust system.

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