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Is it normal that there is oil in the magneto cover on Yamaha xt 550?

No, it is not normal to find oil in the magneto cover of Yamaha XT 550. The magneto cover houses the magneto which is responsible for generating electricity for the motorcycle's ignition system. Oil in the magneto cover can indicate a problem with either the engine's oil seals or the magneto gasket, allowing oil to leak into the cover. It's important to have the source of the oil leak diagnosed and repaired by a qualified mechanic to prevent potential damage to the magneto and other components.