Probably fluid in the cylinder. Liquids are incompressible - number one cause of valve failure in large recipricocating compressors. Otherwise, maybe a gasket chunk helped break the valve, which then helped break the cylinder head. It looks like there is also a little damage on the cylinder wall.
Before rebuilding this one, with its green coolant and water-in-the-oil history, I'd look for a used motor to swap in.

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Prost!