I have oil leaking from right around the pulley that runs the alternator and the fan, in the front of the engine block (see the pic with the green arrow). The arrow highlights the "gap" there where the oil is. What would be the source of this? There is no oil leaking anywhere else.

 

That appears to be a front main seal leak.

It might also be a timing cover leak, but not as likely.

 

I heard the front mail seal is fairly easy to replace. Is that so? How do I do it? Please do NOT tell me I have to unscrew those horizonal bolts that you see in the pic. One of the bolt heads broke off sometime in the past and the shaft stayed screwed in the block. Damn.

 

I looked closer.....the oil seems to be building up right at where that bottom pulley inserts to the engine block, more on the right side (and the left side of the alternator). Nothing really above it, unless the belts sling it there. The bolt that was broken off is one of those horizontal ones towards the top of the block, around the upper pulley.

 

It sounds like a front main seal, and yeah, I think they're fairly easy to replace, although I have not replaced one.

You should be able to remove the belts, the main pulley, and then pry the seal out from there, being VERY careful not to scratch the end of the crankshaft. Make sure you oil the inside lip of the seal to help the install, and drive it in square.

The most difficult part will probably be removing the main pulley bolt. Do some searching for it on this forum, there are lots of great tips.

 

Check the balancer for grooves worn in it as well.

The #1 cause of failure on the 22RE oil seal is not even the seal itself, its a groove worn into the balancer which basically renders the seal useless. If its worn, you can get a sleeve kit or buy a new balancer.