HouseCallAuto 4/7/2010Excessive positive crankcase pressure. Have the PCV system checked. If you remove the oil cap with the engine running and place a plain piece of paper across it, the paper should not push away but should be fluttering and kind of pinned to the opening slightly. If the paper pushes away, that is an indicator of the engine crankcase pressure is positive pressure and not negative as it should be. This will cause oil to try to escape through any opening it can find a path to, in your case up the distributor shaft to the inside of the distributor. Could be a stuck closed PCV valve.
HouseCallAuto 4/7/2010If it passes the PCV test, it could also be an excessively worn distributor with too much shaft clearance.