I did this (relatively) simple repair on my previous 780. The o-ring your mechanic is talking about is at the base of a return line approx 1/2" in diameter that comes out of the bottom of your oil-cooled turbo and back into the block for collection, filtering, and redistribution. It's not under pressure, but even a slight leak or crack in the o-ring will cause seepage at least. In my case, the PO had attempted to repair this (rather poorly) with blue p-tex. This was not the only thing he attempted to repair with said substance, and it took me the better part of a year to un-f**k all his half-assed work. In other words, just putting a ring of goo around the pipe will not permanently solve your problem. Shell out the five bux or so to get the new o-ring, undo the two bolts, finagle the pipe out of the block, remove the old o-ring or what's left of it, and re-finagle the pipe back into place. I found that this was the trickiest part, as it was a fairly tight fit and I didn't want to catch the o-ring up against the sharp edge of the end of the pipe and cut it accidentally. I don't know for sure what this gasket is that others have spoken of (perhaps that's at the turbo end of the return pipe, but I didn't screw with it). I found this to be a quick 15 minute job that saved me from having to constantly check the oil level and constantly change the "car diaper" in my garage. Of course, I had access to a lift, so that made the job significantly easier. Good luck, and YOU CAN DO IT!!!

-Jon '91 Coupe 150K "Gustaf"