HAHAHAHAH no way Jon.....I love my diesel MB's....i did put gas in my 81 300D once....was not my fault, damn gas station attendant..he was filling my car with gas and after a few gallons I saw what he was doing and stopped him....

Hmmm. I would definately take it somewhere else. It may not have a base engine concern at all. It could be fuel contamination if it started after filling up. Is it possible you filled er up with diesel? I would question credability if one goes for the jugular without ruling out other simpler things. When you say knock, do you mean a metal to metal sound or a fuel knock/ping?

I believe it was a metal to metal sound .....like more of a valve knocking......

Next step is a leakdown test for sure.

Thanks for all the help guys....will call my mechanic tomorrow and ask what test he performed and go from there....will post here what happens and the outcome

Sudden onset like that without loss of oil pressure suggests a valve problem and not a piston problem unless as mentioned earlier a damaged valve harmed the piston.

I took the car to another mechanic for a second opinion....and he found no compression in the cylinder as well. He pulled the valve cover an told me it could be a valve or a piston problem. He also stated that its not worth it to as he says "band-aid" the engine an try looking for a good used or reman. Any recomendations on a good reman engine company for a 02 impala v6 3.4 liter or a good used with low miles? I would gladly appreciate it.

still no answer as to what is wrong? "either valve or piston" what kind of answer is that?
crazy.
I'd rather change an ENTIRE head than a motor...

Can't understand it myself Jon!!!! this stuff is above and beyond my knowledge but the second mechanic is saying that by the time I send it out to the machine shop for the valves and then get it back and all the work involved that its not worth it to fix.....I don't get it...found a few used engines with same mileage for 600-700 dollars

Well you could just be in a strange moment in time when second hand engines are plentiful and cheap compared with fixing them...

Cost is definitely one part of the equation - but knowing what you are buying to replace what you've got is another thing... have you guys got a version of

www.honestjohn.co.uk

where common faults with particular engines / cars are made known?

You might be buying a replacement engine with the same fault - it might be better fitting a different engine that was also fitted to your car - i.e. one that is considered to be more reliable...

I have put diesel in a gasser once when no gas was available. The motor runs but pings like heck & smokes bad. when you turn it off it keeps going (carbie fueled).
My guess is burned exhaust valve on this guys. Probably was at highway speed before refuel, bit of carbon on valve seat, burned while motor shut down. Missing bad after.

... I'd rather find out what's wrong before going ahead and installing an unknown history used engine...
you know how yours was treated.
I once pulled a motor (3.8L buick) because 3 mechanics and myself thought it had a rod knock. *(my father said the noise sounded wrong to be a rod) got the new motor delivered. pulled the old motor, started swapping parts over from the old to the new... the harmonic balancer rubber was gone... the knock was the two parts of the balancer banging...
checking out a symptom until it's found and verified is most important to me now.

x2 on that John. I put 4, yes 4 "good" used 4.6 liter V-8's in a Lincoln Town Car stretched limo years ago because the owner did not want to spend the $$$$ on a reman factory long block. Note: a stretched limo does not fit on a conventional lift, nor will it drive onto a "drive-on" lift without high centering. This was an "on your back job." Needless to say, He paid 4x labor and was down for 3 weeks before it rolled out the door without knocking. $7000 later he was back in business. I would rather find a base issue before proceeding to this potentially draining step.

I agree totally that the fault needs to be found first. Its hard to understand why a leak down test was not done as soon as the low comp was found. The plug was out, all that was needed was a bit of air.

not that I agree with the mechanics yet, but I kind of understand their "not worth it" line of thought, barring the fact that they need to do a leakdown test first.
Basically, they don't know what the problem is, but they both seem to think its not a minor issue.
To diagnose further to find out exactly what the issue is will take some time, and the OP paying whatever the shop rate is for diagnosis. Before you even know it, it could be a couple hundred dollars just to pin down the problem.

If the problem turns out to be minor, no harm no foul, but if it turns out to be major as they both believe with the low compression results, you then have to factor the cost of repair/replace with the already incurred cost of having done all this diagnosis work.

time for a cost analysis-

Id go on car-part.com and see what a replacement engine would cost, then get an estimate from the mechanic on what he/she would charge to do a motor swap for you.

Then I would find out what it might cost to redo the head, or rebuild the engine if need be. Do some research on the motor, does it have hydraulic lifters, could some be collapsed? This created a metallic noise in my 1991 mazda.

Then compare that to the value of the vehicle.

If the vehicle is only worth 3-5 grand, , you buy an engine for 500-1000 bucks, pay 1000 bucks for a guy to put it in for you, or put the same money into repairing it, redoing the head for 500-1000 bucks, pay a guy 500-1000 bucks to do it, ect, repairing it is nearly the cost of replacing it, and might be more if you can sell the existing impala to someone for 500-1000 bucks as is.

Personally, I would try and repair it, but if you are paying someone else to do it, that adds up quick