Time for an update...
I took the car on track and although it was struggling with the ignition side of things, at 1.2Bar boost, it was going OK. GPS'd it at 130mph with loads more to go but then I blew the intercooler pipe and sudden loss of power along with clouds of smoke out of the back end! You should be able to spot the hole in the turbo to chargecooler pipe in the pic above..
I was hoping for an easy fix (and excuse to upgrade to silicone pipe), worst case it may have been the turbo but I have a spare one of those. I've also got some newage coilpacks on the way to upgrade from the old ones which degrade quite badly with age.
The parts arrived so I got cracking...
New silicone pipe bought to replace the holed one, this should be good for much higher boost too.
Unfortunately after swapping the pipe and the turbo the oil filter seal blew dumping oil all over the garage floor. I tried another filter and the same thing happened. Googling pointed towards the relief valve on the oil pump being jammed shut.
After fitting another oil pump the engine seems to run ok with normal oil pressure, albeit chucking out a lot of smoke from the oil it has in the intake! The old oil pump relief valve was jammed solid almost closed, even with the pump off the car I can't move it!
Changing the pump meant stripping the rear panels off the car as well as cambelt etc etc so now I had to refit and seal things back up. I'm also using the opportunity of it being up in the air to convert to newage coilpacks which will also help it run better on boost. I made new looms for them tonight as a change and will bypass the old ignitor as the new coilpacks have built in igniters..
The early optimism ended in disappointment, I went for a drive and it was gutless and the oil screen didn't improve. I got a compression tester and one of the cylinders showed no compression at all. There was nothing to do but pull the engine and get the head off to assess...
You can just about make out some damage to the top of the cylinder wall
and if you look carefully you can see that the ring is distorted, I'm assuming that the piston ring land has failed underneath...
So, after contemplating my options and considering where I want to be realistically with this car I've decided to rebuild it with a 2.5 sti bottom end. It's a semi-closed deck block but they are good for about 450bhp, I think that should be enough in a bug!! I was also considering a forged 2 or 2.1 stroker but for drivability the torque of a 2.5 wins for me. I'll upgrade the externals to allow greater power at a later date.