Alright, so here is the story. I recently purchased a 2007 Audi A4 with 20k miles on it from Audi Stevens Creek in San Jose. When I took the car into a local mechanic (the nearest Audi dealer is over 100 miles from where I live) they informed me that the oil filter housing was cracked and they wouldn't work on the car - it was a warranty issue. I had the car towed to Audi Santa Barabara where, after 2 weeks of negotiating, they Audi finally fixed the issue under warranty.

This is where I am now. After driving the car home I noticed the smell of burning oil (a new smell, the car has never smelled before). I looked under the car and saw drips of oil. I pop the hood and what do I see? Half the engine cover is missing, oil is spattered all over the interior of the engine, there is oil pooling up on top of the oil filler cap, and the best part is that upon checking the oil after the car has cooled, the oil is WAY past the max fill line.

My question is two parts:
1. What could cause this type of oil leak?
2. What type of damage could occur by driving the car (over 100 miles) with too much oil?

Thanks in advance!
By the way...Audi Stevens Creek can't work on cars - they caused the initial housing crack and Audi Santa Barabara can't do a simple oil change. STAY AWAY FROM THESE DEALERSHIPS!!