Ah man time for a steering rack rebuild. The boots are just there to keep dirt out of the seals on the rack. If they're leaking oil, then one of the seals is gone and you'll need a rebuild. That can sometimes be the result of a bad tie rod, which would explain the loose feel.

Give the rack doctor a call on Monday and see what he can do for you. The zhp rack is the most sought after e46 variant but pricing should be reasonable since you'll be sending a zhp core.