I agree. Kinda what happened to me. Didn't want to get too much into it with such a sweet running engine. My head gasket was indeed leaking oil out the back. Pulled the head, sent it out, & found numerous cracks at the valve seats & other places. Yes, they will run perfect with minor cracks. Yes, the heads are prone to cracking. While the head is off - CHECK - the bearings & cylinder for wear. If proper oil changes were done, the wear will be minimal (if you're changing the rear seal, you have to pull the crank anyway). As Larry Bible says, it's not the chain, it's the guides. Change all the plastic that can self destruct the chain. Don't forget about the oil pump chain guide & tensioning spring-if your engine has them.
Also-the main timing chain tensioner & spring. At least your engine is out. Others on this forum - you guys have patience & guts - attempt these things with engine in car - in the North - in the cold. Hope all works out, Paul.

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1984 300CD red/blk 290,000 partial resto
1980 240D 4 sp Brn/palomino gone
1997 Mazda Miata STO edition wife's baby
1988 Lincoln Mark VII LSC next resto
1986 Subaru GL wagon daily
1993 Isuzu pickup field beater
2008 Honda Civic EX-L 5sp wife's new car
1978 Honda XL350
1974 Honda XL70 my Calif. ride in HS