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In case you were following my fuel problem I've put it on hold due to this issue.
I've got a slow coolant leak into the engine. I noticed it when my coolant was low with no visible leak and I had steam coming out of the valve cover vent. Coolant is clean, but oil is milky. Front 3 plugs look fine, rear 3 are a bit dark, possibly due to the steam coming out the vent in the air cleaner that's just in front of the rear carb intake. Compression test ranged from 155 to 175#.
I've taken the head off and can't see anything visibly wrong. The N42 head looks fine, and the head gasket looks like new except for being covered in coolant and oil.
FWIW, when I first put this L28 (N42 block) in the car I put my old E31 head on it. When I first started it up I saw a small amount of steam from the valve cover vent, but after about half an hour it went away and I never saw the coolant level drop. A few thousand miles later I switched to this N42 head and never noticed steam again until now. This makes me wonder about the block...
However, when I installed the head the first time I put a little antisieze on the head bolts as one had broken off when I removed them during the initial tear down. This time when I took the bolts off most seemed to not be torqued down as tight as they were when I installed it, which has me wondering if:
1) shoud I have not used antisieze?
2) could the head not being torqued down enough cause a coolant leak but no other problems?
I don't want to just bolt everything back up until I'm sure I've solved the problem.
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