It looks like both valve covers and my oil pan are leaking. Also its coming from the front behind the timing covers, which I am assuming is the infamous oil pump leakage??

 

So to fix this problem, do I just clean the compartment real good (what should I use to clean it) and then pull the valve covers and put the new ones on. Then drain the oil and drop the pan (if it can be dropped -- havent looked yet) and put a new pan gasket in. Then pull all the timing "stuff" off again and replace the oil pump seal??

 

Does this sound right?? 88 gl10 turbo

You've got the right idea. The rocker covers are a simple and quick replacement. To do the pan gasket, you have to unbolt the motor mounts and jack the engine up a few inches to get in there. I would recommend a light coating of RTV silicone on the pan gasket. As far as the oil from the timing covers, it can come from three places. The most likely, as you mentioned, is the oil pump. The front crank seal is another possibility, but they don't generally leak much. The cam seals, however, are very common leakers on this engine and probably need to be replaced. I would recommend doing the R/C gaskets, oil pan gasket, cam seals, crank seals, and oil pump seals all in conjunction with putting on new T-belts. All of this is relatively easy stuff and can be done in a weekend if you're a first timer at it. I would also look at the water pump while you're in there, as it's also a good time to replace that if it's ready.

 

Oh yeah, note on the oil pump seal. If your car has any serious mileage on it and the the oil pump shaft seal is leaking, it most likely have a deep groove worn in the shaft that makes it nearly impossible to fix by just replacing the seal. If your oil pressure is not terrific and you've got a little cash to spare, you could just get a new oil pump from 1stsubaruparts.com for around $140. Another option is to get a replacement seal that is a couple millimeters deeper or shallower so that it rides on a non-grooved area of the shaft. If you're interested in that option, I can look up the part number for you.