2002 H6 - no compression!

I have spark plugs removed from cyl 3, 4, and 2. I performed the cylinder leak down test on the three cylinders with very poor results. 80% leak is standard when I know the valves are be open, when the valves are supposed to close, the needle may jump to 75% leak. Its hard to tell, but I think the air is coming out the exhaust.

I triple checked my crank/cam timing. Its spot on. Triangles all point straight up. It looks just like picture 95 on page 29 of this guide.

What are the chances it jumped timing, bent the exhaust valves, then jumped back in perfect timing? I'm out of ideas. What do I do next? If I pull a valve cover will I be able to tell if a valve is not closing all the way?

Here is a picture in effort to share my misery.

Thank you to everybody contributing to the conversation. I really appreciate your experience and ideas.

A quick review
Fuel - I don't have a pressure tester so I did a volume check. It's pumping plenty of fuel. The spark plugs were also wet with fuel. I'm certain.
Spark - I have a spark tester and verified spark on cyl #3 while my wife cranked the engine over.
Compression - Zero confirmed by compression test on cylinder 3 and 4. Major compression leaks confirmed by cyl leak down test on cylinder 1,2,3,4. I'm certain the cam positions were good. I even rotated the crank by hand 720� deg while doing the test to make sure. The needle doesn't go better than 75% on any. When the valves should be closed, I feel air coming from the tailpipe. I haven't checked cylinder 5 and 6. They are hard to get at, and if the other 4 don't work, what is the point?

Some history on the car.
My parents bought it new and had very little problems with it. The oil was changed every 5k miles and they did primarily highway driving. I bought it 2.5 years ago at 108k miles and continued with the 5k oil change interval. After every oil change, I notice the sound of lifters loudly clanging for the first few seconds until oil pressure builds. According to my Dad, it did that after his oil changes from the get-go. Lately, I would pull the fuel pump fuse and crank the engine until the oil light goes off to prime it after oil changes. About 2 years ago, I noticed a small puff of black smoke from the tailpipe at cold start up in the morning. The oil puffs have grown bigger lately but always at cold start up and they never last. After a few seconds the engine runs normal. It burns about a quart of oil every 4k miles.

Interesting enough, this failure happened at cold start up.

I got the valve cover and off. 2 of the bottom screws were very loose and it was leaking oil from there. Was hoping to see a gap between the cam and lifter when off the lobe but that is not the case. At least now I can see the camshaft working. It verifies my same results. Working on cylinder #1, I can now see exactly when the valves should be closed. When #1 is at TDC and all the timing marks align, I send air into the cylinder and the air just pours out the exhaust. I have the O2 sensor removed and the tailpipe plugged with rags and it pours out the O2 sensor hole. My exhaust valves are not closing. I have no other choice but to remove the cylinder head for further inspection.

I'm going to pick up an engine hoist tonight and I took the day off work tomorrow. Try to stop me if you think I'm crazy, but please have a good logical reason. I know this is a strange one.

I found a used engine at nearby salvage yard but anything reasonably priced has over 100k miles on it. Tell me about these JDM engines if anybody has any personal experience. I used one about 12 years ago on a mitsubishi eclipse. It came nice and clean but I remember I had to swap the intake and a ton of other parts due to the difference in emission requirements. Maybe it's not like that anymore? Shipping cost it probably big too.

I got the engine out. Took me all day and I'm exhausted. Had trouble getting to the lower bell-housing bolts but finally got it. When I separated it from the trans, the torque converter came with it a bit and some fluid leaked out. I just pushed it back in the transmission. Do you think I damaged anything in there? Is there seal behind the torque converter I should replace?

I was hoping to get a cylinder head off today but its going to have to wait. I still need to remove the intake, timing chain, then another 50 or so timing cover bolts.

What am I going to see when I remove the cylinder head? Bent valve, burned seat, hole in valve? My biggest fear is it is perfectly normal and I'm completely crazy!!!!

The cylinder head is off. No bent valves, no holes anywhere. At first I was all upset because nothing was obvious and this is just so strange. But then I took a closer look. LOTS of carbon build up on cylinder and around valve and valve seat.




This appears to be the carbon build up that was holding the exhaust valve open!!! Really??? Will that hold the valve open!?!?



I should also mention that when I drove it the night before, I didn't go far, just moved it in the garage. Then when started the next day, it got another dose of oil and carbon from the bad valve seals. So I guess that was enough???

What do you guys think? Did I figure it out, or did I take apart my wife's car for nothing!?!?!?

The root of the problem was the bad the valve seals. There were bad since 125k and created the oil contamination and carbon buildup that you see here. It never ran low on oil and was never overheated. It certainly could have gotten worse at the end. It's not my car and so I rarely drive it. I can guarantee if it did get worse and mass quantities of blue (yes it has always been blue) smoke are pouring out the exhaust, my wife never would have noticed it.

The machine shop wanted $505 to do the valve job. That includes a valve adjustment and resurfacing. He said he does subaru heads all the time although mostly the 4 cylinder variety.

So I decided to go with the JDM engine. I was really worried after googling JDM Engine Depot Reviews. There are some bad experiences out there. But it is a used engine so there has to be some. The sales guy seemed nice enough. He took pictures of the actual engine I was going to buy and sent me a video of them doing a compression test on it. I got the engine yesterday. It seems ok. Only some minor seepage at the bottom of the timing cover. Valve covers are nice and clean. Lots of aluminum surface corrosion but that seems completely normal for its age. My biggest disappointment so far is the engine wire harness was all cut up. Not sure if they need to do that in Japan for some law because it was cut in several places. It's Friday evening, I don't have intake gaskets or fuel injector o-rings and won't be able to get them for several days so I'm trying like heck to swap the harness without pulling the intake manifold. It's not easy but I think I'm going to get it!