Maybe the upper rail broke and somehow did not jump the chain, and then made the hole in the cover.

If there was damage to the valves, you would certainly know it. Sounds like a buy - with a new chain, tensioner, oil tube kits, upper rails and a new valve cover, you're in business.

Just don't start the car again until you find out what's going on.

__________________
Chuck Taylor
Falls Church VA
'66 200, '66 230SL, '96 SL500. Sold: '81 380SL, '86 300E, '72 250C, '95 C220, 3 '84 280SL's '90 420SEL, '72 280SE, '73 280C, '78 280SE, '70 280SL, '77 450SL, '85 380SL, '87 560SL, '85 380SL, '72 350SL, '96 S500 Coupe