Well guys I had a buddy come over and we took another look at the problem area. What we actually think happened is there seems to be some kind of a sensor or something right behind the starter that actually got pushed in which is what made the hole. If you run your finger above it you can feel a gasket loose and I am now thinking the hole is in the oil pan. Any thoughts from you guys on what could have pushed through you guys have been a big help so far thanks....

 

The 3100 and 3400 series engines have a small oil pressure sending unit or switch (depends on if you have an oil pressure gauge or a oil pressure light). This oil pressure unit sits on the front of the engine, a bit off center (favoring the left/driver side of the car), almost right above the starter.

I have never seen one blow out of the block. Typically what happens is that it begins an oil leak because it has lost it's seal. I had one streaming oil on the radiator once in a Grand Am. Easy way to prove it is get a small mirror (like the dental style mirrors sold at the parts stores. With the car OFF, reach to the sensor, disconnect the wire to it. Position yourself and the mirror so you can see the plug on the sensor. Make sure you are clear of the drive belt and the radiator fan(s) and anything else of bodily harm. Have someone start the car. If that is the source of the leak, you will see oil oozing or squirting out of the sensor.

Any time I've replaced one, I have ALWAYS required the oil pressure sensor socket. The part is cheap, easy to reach, about 5 minutes to change.

This still does not solve the loud knocking noise you discussed at the beginning of this thread BUT might solve your oil leak.