We want to remove the heads. The first mission is to verify the engine has a 66 mm stroke crankshaft (and 94 mm bore, though that can be changed easily by adding new pistons/cylinders). With these two verified, we know the engine is displacing 2 liters (2000 cc) and thereby is a candidate for fuel injection. Is there an *easier* way to verify the engine displacement? Yes, a leak-down test (fill a cylinder with fluid, put it through a stroke and measure the amount that comes out). However, we also want to remove the heads for inspection- to verify they have no cracks, dropping valves, etc. We will have ZERO "mysteries" in this engine by doing this and we will know what additional steps we need to take (i.e. head replacement/rebuild, piston/cylinder replacement, or just ring replacement/cylinder honing).
Additionally, we need to verify the engine a true hydraulic cam lifter type. This is done by inspecting the lifters and the camshaft.
Flywheel off before going onto engine stand.
Front main seal is leaking:

Top of engine missing two covers (flywheel inpsection hole cover on left and flywheel speed pickup sensor missing on right). The latter sensor is not needed. It is for dealerships to hook up to. This hole will be covered by a plug. The missing covers have let oil in (from the leaking main seal) onto the top of the engine.
Engine on stand and most peripherals off. Rear of engine:
Very leaky oil pump. Those are the engine securing brace (aka "mustache bar") mounts to the left and right. They are in good shape but will be replaced because they are cheap so they might as well be.
Oil on front of fan shroud from leaky oil pump:
The following picture is where the fan shroud connects to a heat exchanger (left). "Non-return flaps" were missing (from left and right sides) and thus warm air was being blown back into the cooling system when the auxilliary heater fan was on! Note the intact tabs on the top of that opening. This is where the non-return flap is mounted, via a pin/rod that goes across from tab to tab. the flap hangs off the tab and down over the opening. It opens and closes according to which side has the stronger air push.
Here is the right side. Note the broken off tabs. Fan shroud must be replaced in order to mount the non-return flaps.
See here for more on non-return flaps and all heating stuff:
Next picture is a broken upper alternator bracket. This happened because the lower alternator bracket was never tightened down. I understand why- it's one the last things you do when installing an engine and often gets forgotten as it's hidden in front of the fan shroud. This will be either welded or replaced.
Various pieces of cooling tin cracked like the following picture. These can be welded but will likely just be replaced- as it's easier and we have tons of it! ;-)
The following picture shows a missing seal above the oil pressure sending unit. This is an example of an air cooling leak:

Exhaust manifold-to-head nuts are stainless. They should be copper. The stainless ones will release and thus create an exhaust leak. New ones WILL be the proper copper ones. The copper seals between the manifolds and heads will be annealed and the manifolds will be milled and matched.

Exhaust (including heat exchangers). Catalytic converter will be eliminated by using a straight pipe (Federal, non Cali.) or an aftermarket "Eliminator muffler." I reccomend the latter. It is MUCH simpler but it does cost a little bit more. It eliminates all those crazy components after the heat exchangers. Those are only needed for EGR/emissions. If this vehicle is smog exempt, they can be ridded of and thus eliminating areas for potential leakage and wear.

Next picture shows a missing thermostat. Very common. Mechanics remove them for "full flow" air cooling. WRONG! Engines with no thermostats will NOT get up to operating temperature fast enough, especially in relatively cold weather. While it's trying to get to operating temp, the air cooling system is blowing cold air over the outsides of the cylinders/heads while inside there is heat. So, you have cold on the outside and heat on the inside. This creates expansion and contraction in all the wrong areas and cuts down engine life very significantly. It also does things like loosens nuts that hold the engine together. On this engine, one nut that holds on a head was completely loose! And that is after only 16k miles.
Down to the longblock:
The following two pictures show why the #1 cylinder had such poor compression. It was not cooling proplery because of blockage. See that mess of stuff there on the top? Totally blocked the cooling passage.
Better view of it from the front side. This was blown in by the cooling fan and demostrates why you need a screen over it! A non-broken screen, that is! ;-) Ok, no smiley face here. This is the cause of the low compression that made us decide to go ahead and remove the heads to inspect them and the cylinders for potential replacement.
Now, let's yank those heads off!! Critical inspections here. Drumroll please.....
Heads are off and we're looking into the cylinders. I know it's hard to see the ruler but it is stuck down into the cylinder with the piston at the bottom of a stroke. Look right at the 7 on the ruler. It is at the top of the cylinder, where the piston does stroke up to. It strokes 71 mm! WOOHOO! This engine contains a 2 liter style crankshaft. Score 1!
The pistons and cylinders ARE a 94 mm bore! WOOHOO! However, these could have (and might be) easily replaced IF someone had installed, say, 90 mm (1700 cc style) or 93 mm (1800 cc style) pistons and cylinders. Now, we know this engine has been displacing 2 liters; and I am even more baffled why someone wanted to put on dual Solex carburetors from a 1700/1800 cc engine! No goot. This engine has been STARVING.
Now, what about those heads huh? The heads are AMC brand and were replaced (as new) 16k miles ago. AMC heads are very good heads for a stock 2 liter application. They have a step cut inplace of head gaskets, which is very nice.
Left side head (cylinders 3 and 4). NO visible cracks. NO visible valve droppage or valve seat wear. Will do further cleaning and testing but head is likely VERY GOOD and does not need replaced or rebuilt. The small amount of blowby on #3 is indicative of worn rings and thus oil getting past the rings into the cylinder and being burnt. Engine DID blow black smoke and so I was prepared to see this.
Right side head (cylinders 1 and 2). NO visible cracks! NO visible valve droppage or valve seat failure. Will do further cleaning and testing but head is likely very good and does not need replaced or rebuilt. Note the oil blowby on #1 (the cylinder that was blocked and not cooling). BAD rings. Coincidence? Uh, noooo....
Engine DOES have hydraulic lifters:
And...this pictures shows the cam (lifters pulled out). Maybe hard to tell if you don't know what you're looking at here but all of the cam lobes are in VERY good shape and the cam is likely a hydraulic style.
Down to the shortblock:
Inside cylinders 1 and 2. Note the oil (already discussed) and excessive black carbon. The latter from the carburetors running rich (too much gas) and not being equipped for a 2 liter engine. Likely someone tried to up the gas mixture to try to feed the engine. Ya can't just do that.
Inside cylinders 3 and 4. Same comments as above.
Inside cylinder #3. Note the circus stripes! This is rings up and down along the cylinder wall. Bad. These rings were also likely NOT broken-in properly when the engine was new. So, it never had a chance to be a 100k mile engine.
THE FINAL VERDICT: Overall, a very good engine and exactly what I expected as follows: The engine has a 66 mm crank and hydraulic cam and lifters. Great! It is, for all intents and purposes a d1978-79 2 liter hydraulic engine- Ready for fuel injection. The cam is great, the main bearings are great (connecting rods are tight) and the end play (front to back) is good. Very solid short block. Heads are great.
So, what's bad? Well, that last picture says it. The engine has not been cooling properly (leaks and blockage) and thus the rings have worn fast (they were likely not broken in properly). So, the only thing (inside the engine) that needs help are the rings and cylinders. Can't just replace the rings and hone cylinders. Those circus stripes killed the cylinders (2 of them). New piston/cylinder/ring set and this engine will be TIGHT! :-)