Yes, the item you have circled is the oil cooler, and your engine is the D360 instead of the D358. It is fairly common for those oil coolers to fail and leak coolant into the oil. The good news is, the D360 is less likely to cavitate than the D358, bur it is still possible just not as likely. I would start with the oil cooler, and work from there. It is fairly easy to remove and you should be able to pressure test it without too much work. I would not be scared to rebuild that engine in any home garage, just don't roll the parts around in kitty litter or anything. I have rebuilt numerous tractor and vehicles engine right in my garage and have never had a problem with any of them. Just keep them clean and take precautions not to scar any parts when reassembling.
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Today's Featured Article - Little "M" - by Donnie Anderson. They call me "Little M" and this is my story. For the past several years I have sat against the tree-line, where my parts have rusted and rotted away. For all of these years I have wondered just exactly what happens to old tractors? Times were not always like this. I can remember back to 1948 when I was a brand new John Deere Model M. A man and his wife came to the dealer and looked me over real good. After many talks with the salesman a deal was struck and I, along with a M2 plow, c
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