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Rebuilding an 821 is EMOTIONAL

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BDA:

--- Quote ---I'm trying to look on the bright side and telling myself at least I'm finding the leak now instead of after the engine is back in the car.
--- End quote ---

That's the only way to look at it! Good luck!

jbcollier:
Very unlikely that the way you are holding the liners down will result in a proper seal.

First, meticulously clean the liner seat in the block: absolutely spic and span, bare metal.

Next trial fit the liners and measure the liner protrusion.  It needs to be relatively even from side to side and from cylinder to cylinder.  In addition to shimming gaskets, you may have to swap cylinders around to get things right.  Specs are in the manual.

Now coat the liner seats and bottom liner gasket face with a non-hardening sealant like hylomar.  Do not use a silicone sealer.  Assemble and you are ready to fit the head.

Do not rotate the engine until you do assemble the head or you may tear a liner gasket/shim'seal.

skippopotamus:
Thanks JB.  I'll get some hylomar and try it again. 

skippopotamus:
I ended up ordering Hylomar from Amazon and it'll be here by the end of the week.  I live in the SF Bay Area but couldn't find it locally.  Another lesson.   8)
I'm practicing setting my cam timing but I'm looking at possibly two marks.  I think it is mark #1 on my picture and mark #2 is a nick or scratch.
I'll use a brand spankin' new cam chain.  I'm just practicing with my old, grimy one.

skippopotamus:
I'm thinking now that #2 is the timing mark.  Even though it looks like a scratch everything lines up better when I use it. 

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