Spark plug oil leak

["Rick Hunt" <rhunt@sbs-ec.com>]

I know it can't be good, but how bad is it?  I had noticed a slow 
seepage of oil from the area near the rearmost spark plug of my '90 
200qw.  I finally saw it in action and it looks like there is both 
oil and air (bubbles) being slowly expelled from around the plug.  I 
also occasionally notice a bit of smoke from the exhaust at startup.

I'm sitting down, so tell me the bad news.

Regards,
Rick Hunt

'87 5ktqw
'90 200qw
'95 Golf