Check engine light oil leak?

I saw a brand new ad for a 96 Talon Tsi Awd with 78k about 100 miles from my house; the guy was asking $7500. I asked him if he would take $6700 for it, and he said he would, so I figured it would be worth checking out--so I did. Well, cosmetically, the car is in great shape. It also seems to be good mechanically (it drove and rode very well), but with a few quirks:

1) The seller said the clutch was replaced about 2 months ago; the new clutch was still slipping though. He took it back, and the dealer had put in the wrong type of clutch (apparently there are more than 1 for the 96 tsi awd). So, the dealer put in the correct clutch, and it has worked fine since. Do you think putting in the wrong clutch the first time could have permanently damaged something?

2) The dealer mechanic mentioned at the time of the clutch install that there was a small head gasket leak. (This wasn't in writing, just a verbal remark to the owner. The owner actually just emailed me and said he misspoke, and it is a valve cover gasket leak instead, and cannot harm the engine...not so sure about that one...)

3) The check engine light is on. Seller says it's the o2 sensor; I thought this was the case when I sold my car, but it turned out there was a larger oil leak that was the problem. Who knows?

What do you all think about this? How much of a problem is a valve cover gasket to replace as opposed to a head gasket? Is a faulty o2 sensor a common problem with these cars, and do you think that is truly the cause of the check engine light?

I think that $6700 is a solid price for a 96 tsi awd with 78k, with a perfect body and good interior. What I'm doing now is leaving a $100 deposit with the guy to hold the car for me until Wednesday. I will be back at school, so my parents are going to take the car by a shop to get it looked at, and if everything checks out, finish up the payment and paperwork for me.

Please let me know if anything I've mentioned about this stands out as being out of place or suspicious, and just give me your thoughts in general! Thanks--hopefully I'll soon have my dsm! :bananasmi

There is only one clutch for the turbo DSMs. I have no idea what the dealer would have put in the first time. They probably screwed up and usd that BS story as a cover up. Either way, I wouldnt worry about it.

Oil leaks and check engine lghts have nothing to do with each other. Valve cover gaskets are cheap, and go to a autoparts store like autozone that will read the code for free. IF its a sensor, its only 90 bucks, drive it on...

Are you parents doing the used car inpection thing that mitsu offers, I think it is around 100. Call mitsu up and ask them if they will check the engine light in that inpection for free or not.

And if it is a valve cover gasket leak should you not be able to see it when you look around the valve cover. Like oil coming out of the valve cover. I am not sure someone correct me if I am wrong.

your getting an 95 rs? well you cant goto autozone and get the codes read. Its not OBDII. you have to do the ignition key dance.

Where did the 95 rs come from :)
He is getting a 96 Talon Tsi Awd

oops sorry, too much crack in my diet. lol

HOLD UP...
I just checked the blue book and it is 6200 in excellent condition.
Goto www.kbb.com and find the blue book value

Yea, i did that ashah...I came up with 6590 for a talon tsi awd '96. I forgot to include CD, so I told the owner I would offer 6700, which he said he would accept. He said it is top of the line, all options, so he said his bb value calculation was $7095. He is the original owner, like I said, and he even has the sales sticker off of the showroom floor :bananasmi . Hopefully this will mean the car will be good to go for some time to come (but ya never know...)! It is a solid car, and I think I am going to put my down payment on it today, and pick it up wednesday. Thanks for the help guys! Pics will be up soon if all goes well...