Your realistic options are to fix what you have, which means diagnosing (leakdown) your existing problems and trying to fix it on the cheap, or drop about $10k rebuilding the engine. Leakdown testers are fairly cheap, and well worth it. Pull the valve covers off and see if any valves are stuck open.

the 2.7L has a Mg case - add the thermal reactors and you are looking at a lot of specialty machine work

get it align bored (or checked); aka line bored - the machinist will know what else it needs

you can roll the dice and skip this, but if you do start saving for a 3L motor

The guidance has been very helpful, and much appreciated!

On the thermal reactors, fortunately they were long gone before this car was parked. Not sure what else the PO did, but this is a positive, and the head studs, at least the top ones held up to 20 lbs with the wrench. knock on wood!

The lower head studs are the ones that will give you problems.

Doh! I'll be getting at those shortly.

I asked a similar question here, my 71 has a 77 engine in it.

Honestly, the engine itself is strong and runs nice. But it has webers on it, not CIS.

https://forums.pelicanparts.com/911-engine-rebuilding-forum/1031100-engine-build-advice-71t.html

225 HP would be awesome. What did you end up doing with it?

the thermal reactors are long gone, but warping of the "congealed butter" the case is made from may still be an issue

so, you can pay for machining & inspection now or risk paying a lot more later - your choice

Bruce Anderson quote

25 year inactivity: a few thoughts..
 

A lot can go wrong in 25 years.
I like clickclick's advice, just get it running before jumping to efi. My car has been down for 6 years, while I am doing suspension, brakes, a few upgrades plus family health issues, moving, etc, etc.
At 25 years of being parked, I'd make sure I replaced every single fuel related hose, including the tunnel and evap lines, next, before diving into an engine overhaul, it might be good to know if you have any catastrophic problems, like serious rust, rat chewed wiring, big trans problems, so you can prioritize and plan for the work ahead.
You can live with loose shocks and tired suspension, but the brakes need to be right.
Not trying to dampen your enthusiasm, but a lot of small stuff is going to need to be checked/serviced, wheel bearings, CVs, boots, brake lines, lights.etc.
I'm doing a new fuel tank, due to rust through, upgrading to front, new pump and late ffuel lines, hope to be cleaning, testing the CIS soon, after the rear suspension/brakes.
Good luck with the dead hole

Just driving the piss out of it! The car goes great.

Problem seems to have been confirmed. Verified that #2 intake valve is well sealed. Exhaust valve seems to be stuck open. lot of play between the rocketr arm and valve stem. Sprayed the port down with Blaster and did some tapping on the valve and top of the arm. No luck yet. Back at it toward the end of the week. hopefully.

Back at it... After mush tapping on the valve stem and oil sprays, I decided to put the valve cover back on, finish up the fuel system and see if #2 would free by letting the engine run. Though I would let this happen and adjust valves and oil after some engine run time. So, long story short I did that, and this is a video of the engine running now.

https://m.youtube.com/watch?v=g-6ju6PqJT0&feature=youtu.be

I checked compression after this run, and still have zero compression in number 2. I was alarmed by the engine noise, so haven’t let it run much. Any thoughts on what you hear or see in the video?

cfassett, did you ever get around to a leakdown test on that engine? The audio from the youtube video did not seem consistent to me for a stuck valve. I would expect a lot of popping. What I hear is a very rhythmic tapping noise. I do not blame you at all for being hesitant to run it.

BTW, that seems to have a nasty vibration. Is the rocker arm depressing the valve continuously, or is it free to bang on top of the valve? That would explain the vibration a bit.

https://www.bing.com/videos/search?q=automotive+engine+valve+traing+in+motion& &view=detail&mid=479C4968DDB0370F8C6E479C4968DDB03 70F8C6E&&FORM=VRDGAR

I haven’t yet. Since I don’t have the equipment and that one cylinder had no compression, I was planning to let it run a while and let some of the kinks work themselves out.

Patkeefe, on the vibration, yes, with the assumption that the valve is stuck open, I didn’t bother to adjust valve gaps while I was in there, but set a ballpark gap on number 2 after tapping on it... wanted to allow it to move out and seat. It was set at about .010from the position it was in.

I ran it again last night before hitting the sack and didn’t hear as much of the tapping, but there was still the vibration.

The vibration could be from uneven running of the motor. I would take something like a wooden dowel with a hammer to tap on the lifter of your stuck valve. That may loosen it up.

There is a chance that some carbon from the combustion chamber broke off and is stuck on the valve face, preventing it from closing.

Also, you may want to confirm all the other cylinders are actually firing. Perhaps pull each plug wire to confirm.

I did a fair amount of tapping with a small hammer with the end wrapped in electrical tape... not sure if it helped or not.

Today, tried to adjust valve gaps, which were all tight against the lifters to begin with. Loosened all to start. Adjusted 1 and 6 no problem. Then when it gets to 2, the crank binds at this same spot on the pulley, every single time. About 1/2” short of TDC for #2.

I bump the ignition key and it moves past without issue, but I can’t seem to move it past there by hand to set # 2.http://forums.pelicanparts.com/uploa...1567369305.jpg

That sounds like a more serious problem. I would get in there with a bore scope and try and see what is going on. It almost sounds like the valve stem is bent and the valve is touching the piston....

I would also want to make sure the chain tensioners are still doing their job. After sitting they could have gone soft.

I agree with Gordon, look in through the spark plug hole with a borescope. Sounds like something is on top of the piston and hitting the head. It sounded pretty ratty in the video. I guess you now know why it was parked. Ugh.

Thanks for the advice. I did look in there before with the scope and saw nothing of concern. Will do so again shortly, maybe run a magnet in there as well. I've had some local friends helping out as well. We've been adjusting the valves, which has been a challenge as noted above. While the valve covers were still off and some most of the valves still loose, we fired it up. Local VW expert was on hand and wanted to evaluate it. Interesting in that the tapping noise was not there this time. Valves appear to all be moving fine at this point. I'll do as suggested and let you know what happens next.

Thanks for all the input and guidance! Any other thoughts, please let me know.