leaky valve covers.. decent size leak(s)
If you shop around you can pick up valve cover gaskets that have a thin steel core with ribbed rubber bonded to both sides. These are the best gaskets I have ever used and they are re-usable.
Also, if you wants some good valve covers cheap I have a set of Moroso chromed steel LA valve covers I will sell you for $20 plus shipping.
I don't know how old they are (they were on the 360 when I picke it up) but there is no rust and they aren't bent along the rails. There are some very fine scratches on them like the swirl marks you see in your paint.