How common is it for engine oil to leak up throught the distributor shaft housing and collect in the distributor (under the rotor, or pick up coil, base of dist top, etc)?

Could this cause a burning oil smell at mid to high rpm's?

I guess any ammount of oil leaking into distributor is unacceptable?

Thanks!

 

Not really, but it is a sign that the PCV system isn't working right allowing pressure to build in the crankcase.
(this usually happens when aftermarket valvecovers are installed and the pcv system is not put back on)

 

Well, aftermarket valve covers are on, but have pcv valve on one side and breather on the other. PCV valve looks clean and rattles when you shake it, breather looks clean enough.

What else should I look for, or how to test if pcv system is working.

I had kind of thought of that also. Couldn't high crank case pressure also force oil out of non-tradational oil leak locations?

 

You can check the pcv system by removing the pipe/filter that provides the air into the crankcase and holding your thumb over the hole for a minute at idle. If it inhales when you take your thumb off it's ok. If it exhales, there may be too much blowby or there is a restriction in the valve circuit.
If the pcv system is working, the problem is in the distributor.

 

You can test the PCV valve manually too - take it off, along with the hose to the carb. First, shake it, and see if it rattles. If it does, its good. Now, suck on the carb end of the hose, and you should be able to suck air through it. Now blow - it shouldn't let much if anything through.

Oil up the distributor shaft can also mean its got worn bushings as well. How many miles on this motor?

 

100k on distributor +/-

Not too many on bottom end, but was of questionable build quality.

Would large amounts of blowby from poorly honed cylinder walls do things like push oil up distributors and constantly blow out intake gaskets along china walls?

 

That, along with oil out the dipstick, out the oil-pan gaskets, crank seals, and backing up oil in the pcv breather/filter.
...but it's too easy to check the engine for blowby, takes like a minute, tools required: your thumb.

 

I took a dizzy apart and it had what I would call an oil deflector. It was plastic and could very well be gone.