Guys, I skimmed the thread. I see a couple of repairs where tryed. I would have followed the same course of repair on this motor to this point.
Here's my process I would follow.
Oil consumpion test with the correct
oil weight called for. If we don't know I would go with a 10-40 of 15-40
oil. This motor should be warmed up before moving. Look where the car was sitting for oil leaking on the ground. Oil dye added to motor to catch any leaks from gaskets or seals. Compression test and leak down tests are not going to be any good if the oil is leaking through valves and seals. The numbers will be high for compression and reading 0 for leak down. No help. I would do 1 more test of pressurizing the motor block if the intake seals are not leaking. I am looking for air sound pushing out into a head or intake. This is low pressure of no more than 5-10 psi. It's hard to do this hot with the motor just running. Again looking for an oil leak into the intake or cylinders.
Let's say no leak is found, If we have a carb dumping fuel into the motor, the cylinders are washed out. 100 miles and the bores and rings are done. Blue smoke special. Rebuild.
Here's what I would do next, pull the motor.
Does some one have pictures of this pitting? Motors sit for years or months and start and run with no major oil suckage. I know of farm tractors that sit this way for 10 months. They are gas motors not diesel. Smoke on startup but gone after couple of minutes.
Depending on where the pits are and we have no way to see how deep they are in the cylinder wall, I would go with 2 problems, cylinder wall are too far out of round. The high spots show where the head bolts are pulling on the block. It's not common but the differents between a cold and hot block will cause a problem. Expansion, iron goes about .0008" to .001"+ alum more.
My main issue is the Total sealing gapless piston rings. I have had problems with them years ago when they first came out. They can suck the oil though the valve guides and valve stem seals that are in prefect specs. This is OEM seals and swapped to pos seal with the ring that seals tighter to the valve stem. The vacuum of the motor was 15-17 hg. The cam was not OEM numbers and not .600" lift either. Is it possible we have the wrong PCV valve on the motor and it is allowed to build up pressure?
We have had 3-5 different driver drive this car. The word normal driving leaves a LARGE differents. I get this every day at work.
Here's what I would do, hook up a vacuum gauge to the motor. Lets see if we have a valve or pressure reading. Could be about 0 plus or minus a couple of Hg's. If this is fine, I am pulling the motor apart and start with the pitting depth and the bore out of round readings. I would also flip the heads and check for valves sealing on the seats over night. Valve stem end play, we see a major oil sucking problem. Are the plugs all carboned out in all 8 cylinders? Why heads are off doing a bore check on block in 8 spots from bottom to top in 1/2" checks. This takes time to get right and do right. If the heads hold and the block bores are in spec. I am throwing out those total seal piston seals and using a good conventional moly ring set with the correct end gaps to seal and the gaps setup to be 180 degrees off each other and same with oil rings. Use a glaze bead hone tool and run it up and down the cylinder 3-5 strokes to ruff up the walls. Reassemble the motor and breakin with the normal 10-15 minutes with breakin oil. drain and refill with what you are going to run down the road. I like a 10-40 or 15-40 rotella and a bottle of Lucas oil suppliment. This is to be added to the motor running and slowly to mix throughout. You can do the repair in the car on blocks. I like the out of car as easier. 250 mile breakin. and check the oil level. No black smoke coming from side pipes from a rich carb. I will save the carb discussion for another year. If this still is sucking oil, I'm looking for cracks.
Guys this is a nice club and everyone wants to help. I got a PM on this. I am tired and just giving the best info on problems I have had or the last 40+ years of motor building and repairs. I have had a couple of motors that broke my back and couldn't be fixed. It was said that this motor was a cheap rebuild and it has caused problems. I have not heard of these builders here as FE builders. You say they are excellent, This is what we need, Pros with a good rep. Jamo has pulled out the big stick and said enough. Let's fix the motor and move on. In the evening lets have a cold one.
Bill you have my number. Rick L.