Hello, This is a problem that was concealed and you should get money back for this defect. You would have to get a lawyer to settle this if the old owner will not do anything.
The problem is that the casting for the oil filter is usually a part of the block. The filter was probably patched with a sealer that did not hold. What I would say to try is J-B Weld, a chemical that mixes like bondo. You would clean the area with Brake-Clean and scuff the surrounding surface with rough steelwool. Then apply JB to the surface leaving a higher bead over the gouge. After the product has cured, get a flat tool and wrap wet sanding paper around it. Then level the bead to match the surface of the casting.
Now you have a reasonable plug for the defect. You do not want to remove the oil filter again. To be able to change oil filters, spend some money to buy an oil filter relocation kit. When you install the kit, you will use the cap included in the kit to seal the old oil filter opening. You can use a permanent gasket sealer around the bad spot and torque the cap down.
You then attach the oil lines to the cap and the opposite ends to the adapter included in the kit. Allow for slack and mount the adapter in a convenient place.
Another method would depend on if you have an aluminum block. Today, aluminum can be welded. A filler could be welded and then ground flush to restore the ridge for the oil filter. Although some areas have little room, a Dremmel tool with a grinder head can work in many small places.
We are also talking about precision grinding or this will not work.
I would like to hear from you when this repair is finished. I hope my solution is very helpful to you.
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