SOLD

I isolated the fault now!   A compression test showed no compression what's so ever on CYL 2.  Even with my finger over the port I could feel no signs of compression.    Pulled the head and found that CYL 2 had the intake valve stuck open.  The piston was soaked compared to the other two as well.  I haven't been running any fuel treatment in the car for a number of year now.  Looks like that was a mistake and has caused excessive carbon build up on the valve stem causing it to stick.  I use Co-op diesel here on Vancouver Island.  A few years back they seemed to change the formula and I stopped getting fouling injectors.     Now the question I have to ask myself...  Rebuild or replace the engine.  Hmm.  I need the car back in service, so thinking about replacing it with a working used one.  Then keep this one as a rebuild core. 

Well, pulled the engine today and started breaking it down.   Then I realized it's not a mechanical timing issue.  I noticed a timing mark on the flywheel and a pulled the valve cover.  Lined up the TDC mark and the cam shaft gar mark also looks good.  No timing slip.    Attaching photos...   Now I'm wondering if there is a way to do a compression test before I break it down more.  

Just got it back from Smart last night.    They diagnosed it as "internal engine fault".  They indicate that means it's not a bolded on accessory or sensor but something internal to the engine it's self.  Looks like I'm pulling the engine this weekend.  Checking the timing alignment will be my first goal. 

Thanks for the feedback Stick!   I'm not sold on that idea yet.  Engine was rebuilt just over 40K ago.  Cords, a very reputable shop locally, did the valves/guides and decked the head for me.    Haven't been able to isolate the issue so Smart is going to take a stab at it Wed.