So I finally have time to look into this and get this car back on the grid ASAP!

I have taken the injectors off (ready to be sent away for cleaning) and also have the intake off. Which is when I noticed a coating of black deposits in both the head and the intake. I assume this is not normal? I have also noticed a small amount of oily residual in the vacuum lines and throttle body.

I plan on doing a leak down test either tonight or tomorrow. I tried to attach pictures but it does not seem to be working right now.

The leak down test revealed 1,2,4 all around 3% but #3 is losing 50% through the intake valve. So I am going to have to take the head off and see why.

Could also explain all the carbon in the intake, if the intake is open all the time and the exhaust gases are going escaping into the intake.

Bent valve, dropped valve guide, dropped valve seat or broken valve. All not good. BUT...before you pull the head though, pull the cam housing only. Inspect that valve compared to the rest from the top. if it is very much higher than the rest it is likely bent or one of the other above scenarios, If it looks OK then try this:

Set the #3 cylinder at BDC for that piston (piston down). Spray carb cleaner into the intake port for cylinder #3 until it pools on the closed valve, then with a flat punch and a hammer tap the top of the valve stem to momentarily open the valve several times until the carb cleaner is gone into the cylinder. With your leakdown tester compress Cylinder #3 to whatever the top pressure is for your compressor. Spray carb cleaner in the intake port again and then cover the port with a rag. Then again with a flat punch and a hammer, tap the top of the valve stem. It will make a big bang as the compression escapes the cylinder. Do this several times. Then check the leakdown again. Often times it is severe carbon buildup or other foreign matter that jams the valve from seating. I cant tell you how many times this has worked for me.

Good Luck!

Thanks for the idea Joe, there is a lot of carbon on the valves particularly #3. I will let you know how it goes.

I tried cleaning up the valves without taking over the head and the numbers definitely got better. Leak down changed to 25%, which is still too high. So I will be taking over the head later this week.

Thanks again Joe!

So just to give an update.

After pulling the whole thing apart I found that the head gasket around the number 3 cylinder has blown. I am in the process of cleaning up all the messing and checking the head for warpage etc. I will be back next year for sure!!