Ok, I talked to Marv last night and again today on his lunch break. Here's whats going on:
Marv your CCV(crank case vent valve), the line going to it and the passages in the valve cover are plugged. You'll still need to remove your valve cover, so go ahead and order the gasket kit. Unfortunately the CCV becomes brittle and usually breaks when you try to take it apart and clean it. So you're going to have to order a new one of those too. Since the line going to the CCV is cracked and partially melted, order that as well. The whole job from start to finish should take about an hour. As aceyx mentioned, you could re-use your old valve cover bolts though most mechs would recommend replacing them. You should atleast replace the grommets that AutoM3 mentioned. When you order the valve cover gasket kit, be sure to get the complete kit with the 4 spark plug hole gaskets. Use a can of brake cleaner to blow out all of the passages on the valve cover before you re-install it. Specifically the ones going to the CCV hose. Once the gasket is in place, position the valve cover and insure that the gasket hasn't moved. Then thread all of the bolts in by hand until hand tight. THIS IS THE IMPORTANT PART! You're going to need a torque wrench. While tightening the bolts GO ONLY UNTIL THE SPECIFIED TORQUE AND STOP. Do not back the bolt out if you go over, as the gasket has already been crushed and thus it will certainly leak if you back the bolt off. Also, Tighten the bolts in a cross-pattern as you would tighten the lug nuts on your wheels. There's a specific pattern IIRC on pelicanparts in one of the tech articles. This is a critical step in achieving an evenly distributed torque.
Things to order:
valve cover gasket kit including spark plug gaskets
valve cover bolt grommets
CCV(#16 in the diagram)
CCV hose(#13 in the diagram)
Here's a couple threads with similar problems:
http://www.318ti.org/forum/showthread.php?t=18113 http://www.318ti.org/forum/showthread.php?t=16665