HELP!.....Check Engine Light - P0171

I have a 2000 Mercury Mystique with a 2.0 engine that had a check engine light appear a few days ago. I had a friend check it and code P0171 appeared. He cleared it and it didn't appear until 2 days later and I then stopped at my local AutoZone and it was definitely the same code (P0171). I asked the guy what he thought and the first thing out of his mouth was "bad 02 sensor on Bank 1". Not knowing which sensor is Bank 1, I decided to purchase 2 new 02 sensors (because the Mystique takes 2). Unfortunately, the only 02 sensor that I could get out was the one near the catalytic converter. The one near the exhaust manifold would have to wait until my brother (the true mechanic) can remove that one.

Then I decided while I had the car up on ramps that I would change the oil and when I was changing the air filter, I noticed a small deposit of oil in the bottom of the air filter housing and the crankcase breather filter was saturated with oil. I went to the local Ford dealer and purchased a new CBF. Then, I pulled the spark plug wires to check the condition of the plugs and was surprisingly met with a decent amount of oil in the holes where the spark plugs sit.:banghead: What confuses me is that I don't see any oil leaking on the exterior of the valve cover gasket and maybe the grommets on the inside are shot and that's why the oil is leaking near the spark plugs. The car is NOT blowing BLUE smoke in case you're wondering.

I assumed the following conditions and maybe someone could correct me if I'm wrong.......

a) 02 sensor above the exhaust manifold needs to be replaced; and
b) the PCV valve needs to be replaced; and
c) I need to install a new valve cover gasket.

Can anyone point me in the correct direction as to what I'm looking for?

Heres a list of all the OBD-II codes on contour.org.
http://www.contour.org/FAQ/FAQ.php?s=probs&displayid=10

Possible causes for P1071. Again been discussed on contour.org.
http://www.contour.org/ubbthreads/showflat.php?Cat=&Board=trouble&Number=1237767&Forum=trouble&Words=0171&Match=Entire%20Phrase&Searchpage=0&Limit=2500&Old=allposts&Main=1236910&Search=true#Post1237767

People automatically assume that if they get a rich or lean code that the 02 sensor must be bad. People dont realize that the 02 sensor is probably doing its job and is working properly. You have an I4 which only has 1 bank (front one). You have two 02 sensors, an upstream and downstream. Seeing as how a code didnt specify an upstream or downstream lean code, it seems both 02 sensors are registering lean, which makes me think, IT REALLY IS LEAN. Check the link on contour.org I supplied for probably causes.

If you have oil in the spark plugs, youve got bad valve cover spark plug gaskets.
Again, been discussed numerous times on CEG.
http://www.contour.org/ubbthreads/showflat.php?Cat=&Board=trouble&Number=1016117&Forum=trouble&Words=oil%20spark%20plugs&Match=And&Searchpage=0&Limit=2500&Old=allposts&Main=1016117&Search=true#Post1016117

OK! I now replaced both 02 sensors and the light went out.

As for the oil on the spark plugs, the valve cover gasket was replaced.

P.S. We replaced the PCV valve also.