Iain,
I have experienced an identical problem with the oil seal on the drive shaft when the flimsy steel bracket holding it in place was bent.
It could be that the thermostat set-up has increased oil pressure in the scavenging system, especially when the control valve is somewhere in the middle (part of flow through cooler, part directly to tank). The type of pump used means that at less flow pressure increases enormously, but I think that in general this setup is OK if the oil is pumped back correctly into the tank. The pump will deliver sufficient flow regardless of the backpressure.
The solution you propose would be ideal but does involve a lot of work. The bushmechanic would fabricate a kind of wedge to push between starter and plug. Wood would be the most practical material.
Then, when the engine has to be removed for other reasons you can have the threaded plug which would not be that costly as it is a simple operation.
I would replace the plug for a new one anyway as it has been tinkered with and the oil system is too important to take risks.
Auke
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