Volvo AQ 260A lost compression, water in valve cover

[eggs712]

My 1985 Volvo Penta 260A with new risers was seemingly running well for a few hours after sitting for 10+ years. I was making about 4600 rpm WOT, cold started easily, but seemed to be vapor locking after warming up (140 thermostat). After a one hour hard run in a following sea, the motor fell flat, but I was able to idle it back. It started easily the next day, got on plane fast (1985 Bayliner 2750), and still made 4K+ RPMs, but fell flat again after 20 minutes and died for good.

Here are what the spark plugs look like: (2, 4, 6, 8):


(1, 3, 5, 7):


Oil looks fine to me:


Cold compression numbers:
1- 108
2- 91
3- 92 (100 with oil squirted in cylinder)
4- 80 (same with oil squirted in cylinder)
5- 92 (same with oil squirted in cylinder)
6- 67 (same with oil squirted in cylinder)
7- 101
8- 105

My started turned slower than it should even with the spark plugs removed.

Today I took off the valve covers and saw this on both sides:


To my untrained eye, something looks wrong with the valves on cylinders 2 & 6:



Any ideas on what damaged I caused? I can take the heads off tomorrow to get more pics.

 

[alldodge]

Don't see an issue with valves on 2 and 6, they appear to be opening

You most likely blew the head gasket and removing the head will verify

 

[Lou C]

Did you get water out of the cyls when doing your compression test?
Only other diagnostic you can do is a leak down test.

 

[eggs712]

Did you get water out of the cyls when doing your compression test?
Only other diagnostic you can do is a leak down test.

Nothing came out of the cylinders while checking compression

 

[eggs712]

I cleaned it up some before taking a pic, but there was milky oil under the intake manifold. The manifold itself doesn't have any cracks or holes that I see:




There was lots of carbon buildup by the middle cylinders of both sides.

Here is what it looked like under the heads
1, 3, 5, 7:


Cracks in two valves that I see:


2, 4, 6, 8:



Cracks in head around valves, worst of all on 6:

 

[eggs712]

Cylinders all looked like these two:

 

[Bondo]

I cleaned it up some before taking a pic, but there was milky oil under the intake manifold. The manifold itself doesn't have any cracks or holes that I see:

Ayuh,...... That little bit of milkiness there is just condensation,.....
No worries with that,....