I thought I was onto something yesterday as I was dissembling the head. The intake valve guides were all tight but the exhaust guides had some play in them. However my engineer inspected them and told me that they're all perfect and the extra play allows for the expansion of the much hotter exhaust valves. The valves themselves all measured up within tolerances. I must reiterate that he is used by Mercedes of Colindale and so has seen many m103 heads.

He then inspected the block, immediately telling me that there is no wear in it but that it has become glazed and looks like a 100,000 mi engine (despite having a new bore 5,000 mi ago). He told me to lap the valves in again and get the pistons to him. The bore will be honed and a new set of rings put on. The engine was running very rich for 500 mi after the rebuild which he thinks caused the glazing.

P.S. the new m103 valve stem seals are all the same (both intake and exhaust), just bought them from Mercedes. An improvement or cost-cutting?!