Well, to put a bow on this whole story, I got my TL8 running like a top. My neighbor, a good old hillbilly that builds racing motors, honed out the number two with 220 grit stones as well as rehashed the other three cylinders. I then installed four new pistons, rings and wrist pins but no bearings as all the low end bearings look great. Surprisingly, my rebuild kit and gasket kit came from China that I ordered via Alibaba and the total cost of the gasket kit, pistons, rings, wrist pins, snap rings was around $240 and the shipping was 150ish via DHL which took much longer than expected.
As a reminder, this was an entirely in-frame repair. The skid plate on the Takeuchi covers the oil pan with room to spare so getting to the bottom was a breeze, it's also how I was able to change the starter before starting on this process. Otherwise you couldn't get your hands in there to get to the starter. So a full gasket kit, 4 new pistons, RTV on the oil pan, all new fluids except hydraulic fluid, all new filters (except the hydraulic pickup, that drain and clean is coming soon), drained the diesel tank and added some fresh juice, blew the radiator out, charge the battery, purge air and it started right up. I let it idle for a couple of hours to seat the rings and then ran it over the weekend moving logs for a couple of hours. It performed flawlessly.
No smoke, lots of power and it sounds wonderful.
Thanks to everybody that weighed in. I really appreciate the help. Oh, also, I did have the head cleaned and valves checked at the local machine shop. He said it had a tiny bit of warp, they took 8,000ths off the head, but on the whole it looked really good. So that's the latest and greatest for this beautiful little piece of equipment.
And while there was lots of commentary about buying at auction, I knew the roll of the dice could include this level of surgery on the motor or even a replacement motor. But I'd say I got lucky and I'll take that kind of luck.
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