Well, I took the cheap way out, disassembled the engine found that the liners were shot, pistons badly scuffed, and two cracked oil rings. I found a used motor with 150k on it for $350. Couldn't beat it, it was going to cost 3 times that to rebuild the one I had with 250K on it (My odometer stopped working while the previous owner had it, for about 5 years!)

It was the easiest way I thought, get an engine with low mileage, never had human hands into it since it was built....figure it should last longer than the car.

Yes and no on the good compression.....a dry cylinder will give lower compression readings than a cylinder lubed with some oil, the three cylinders he has that are around 400psi are probably the ones that have the problem. If he were to remove all 4 glo-plugs he probably find a lot of ash on the ends of them from the oil useage. Valves don't leak that much oil even with bad seals. If I am not mistaken specs on the compression is around 350psi. 400 just seems awfully high to me, especially with 150K on the engine.

Dieseldaddy.....

Bad syncros my friend, unless by some small remote chance the clutch slave cylinder is failing and the disc is not being released enough, but if that were the case you would have trouble getting it into 1st and reverese.

The syncros slow the speed gear down or up to force them both to spin at the same speed allowing smooth engagement into a gear. Say you shift from second to third, the 3/4 syncro has to speed up 3rd gear to the speed that 2nd gear was at, when the syncros are worn they don't do that and that is where the grinding is coming in, 3/4 syncro hub is grinding against 3rd gear until the speeds of the hub and gear are the same.

End result, replace 3rd gear, 1/2 and 3/4 syncros, 3/4 syncro hub, check the bearings in the trans, lots of metal running around from all the grinding.

Sorry nothing but bad news, have rebuilt lots of standard transmissions.....they have a lot of hard wearing parts!