What events led up to the backfiring? Did you just start the car one day and it start backfiring? Have you mis-shifted at highspeed or over-revved the engine? There are a couple possibilities here. Either bent valves from over-revving, the engine has jumped timing, fried coil or you have a coil driver in the DME that fried because of the oil in the spark plug cavity. Most likely the engine hasn't jumped timing unless you have extremely high mileage or you over-revved the engine which also may have bent the valves. Because you stated there was considerable amounts of oil in the number 2 hole, I would look towards the number 2 ignition coil as your problem. Go buy one and try swapping it out. If it works then great. If not, return it. Then I would be concerned about the DME.
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