I recently purchased a 98 discovery 1. Previous owner stated he found oil in coolant. I drained and flushed system. Coolant is leaking and car begins to over heat upon driving. Looking for any leads to see if anyone can help out.

leak seems to be near passenger side next to transmission and leaking on drive shaft and right side of "y" cat. tried to upload video but it wont let me post.

 

Sounds like the heater core hoses are leaking.

And you almost definitely need head gaskets. And who knows what else.

 

Sounds like it overheated from leaking HG's at the water jacket. If it had coolant/oil mix the coolant would smell weird & if the oil had water in it the oil would look like mocha. Front timing cover gasket is the usual suspect for that kind of mixture.

 

coolant leak at rear as described sounds like the valley pan gasket I just replaced for that reason - while running you will see coolant going down bell housing
do your valve cover (VC) gaskets while your there and make sure/replace the PCV - once clogged it can blow oil out the VC gaskets - there is a alt PVC from a honda Odyssey that can be spliced into the vent line.