found the culprit ! After running it and making it blow plenty of smoke i took the exhaust manifold off. It appears cyl 2 has a cracked ring or similar. Looks like the 1.8 will be going in this weekend. Hope it goes fairly smoothly. Pain in the ass considering i thought it was valve stems and spent half the week (after work) redoing the head etc. Anyways no point whining ! will just get to throw the 1.8 in a bit sooner then i thought.