Well....it's always a concern when an engine starts "making" oil because, in a nutshell, they don't! If you see your oil level rising it is because something "extra" is going in the crankcase. Usually fuel or coolant. Neither of which is desirable and could lead to bearing damage. Whether or not you smell gas, you describe seeing the dye. And I will have to disagree with your tech....it's NOT just the dye. It's the dye and the gas it's mixed with IF the oil level is rising.
Whether the engine is fuel injected or carbureted COULD have some bearing on what might be happening to cause this. If the engine is carbureted, fuel contamination typically occurs because the thermostat(s) are stuck open and the engine never gets up to operating temperature. This results in poor combustion, allowing raw fuel vapor to work it's way past the piston rings and enter the oil sump.
A fuel injected engine will behave pretty much the same with stuck stats. But, if the thermostat is working properly you could still have fuel contamination due to a leaking injector.
Either you or a competent mechanic need to verify thermostat operation and engine temp to begin figuring out why your engine is making oil.
Good luck.
