My Neon engine leaks 3 to 5 drops of oil per night. I tried to locate the leak and looks like it is dripping somewhere between the engine block and transaxle. I've read somewhere that a dye could be used to locate the leak. Is it the best solution? What gasket could have failed and created the leak? Thanks for any suggestion.

Sounds like the rear main seal to me... I would get it fixed because its only bound to get worse as time presses on. As far as a dye... I'm not to sure about that, I've heard about it for coolants but never for oil. You have to be really careful about what you put in your engine like that.

its that the rms and there is a dye but it requires a black light its is probly your best way to find the leak though

Also look at your cam position sensor.
It is known to leak and will run around the block and look like
its comeing from between the engine and tranny.

I work at a Dodge Dealership and see alot of Neons come in for repairs. I saw once an oil leak that actually was a result of a bad PVC valve. What was happening was oil was pooling up in the air cleaner housing and slowly leaking on the ground. Something to consider when you're trying to locate where it's coming from....

On my neon, I had a leak that kept getting worse as time went on, I just recently fixed it. THe description you provided sounded a lot like mine. I had to get the head gasket replaced because it was leaking down around my transaxle, I thought my tranny was leaking for the longest time!!!!

On my neon, I had a leak that kept getting worse as time went on, I just recently fixed it. THe description you provided sounded a lot like mine. I had to get the head gasket replaced because it was leaking down around my transaxle, I thought my tranny was leaking for the longest time!!!!
I have known a few people that have had the head gasket replaced only to get an oil leak that slowly turns into a river. Myself included.
The only reason that I continue to help pave the roads is, since my car has 240K miles on the original engin, I bought a 48K mile engin from a salvage yard and am refurbishing it to drop in the ol girl. 480K here I come.