stretch, quite right. i have the impression that there are no further worthwhile diagnostics to be done with the head on. the two options are thus: remove the head, hope to find the problem, and rebuild it while it's off; or replace the engine. if the former were like 1/3 the price of the latter it would be a no-brainer, but it's actually 2/3 the price and only may solve the problem.

do you think there is something else i should ask the shop to do?

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'77 240D, 504H, OM617.952, etc.