So any other suggestions? Is there a diagnostic route I can take from here or do I need a new engine?

Replace the #6 wire again or check it.
Replace the plug.

I don't think you need a new engine if there is not a loose sleeve making noise.

Have you done a compression test? Misfire is detected by the crankshaft sensor and cam position sensor. Flashing light means potential cat damage so stop. 1306 code will give you the flashing light for potential cat damage. 306 will not flash. 1306 means fuel is going in and not burning, engine slows at that point on the flywheel, O2 sensor detects raw fuel that can kill the cat, fuel injectors may be Ok. 306 suggests not enough fuel to trigger the O2 sensor so could be a fuel injector.

Great information. I have a scan tool hooked up while I drive and its a 0306 and 0300 not 1306 . I have not done a compression test but I will try to this week. Will look into the injector...

I would also suggest fuel injector. Can of Seafoam in your tank may clean it up.

You can swap 2 fuel injectors to see if the problem moves to another cylinder, but if the Seafoam doesn't clear it up I would first check the coil rather than digging in to get the injectors out. You can test your coil before replacing it. There are 2 identical units, so if you were to swap them you could see if the misfire goes to #8 (that is if you do not turn the coils around, but just swap spots). Check out the image in Rave on page 18-2-80 to see which wire goes where after you swapped the coils.

Thanks disco. Good advice. Injector sounds reasonable but I will try the coil first

you may also have a valve sticking open. That too will cause a misfire.

I guess chainging oil a lot and putting in Seafoam or some of that cleaner.
Not sure how safe Seafoam is.

I put in a bottle of techron which I have uses before with good results. 20 mile commute to work and the light was still blinking. It seems to blink on an upshift during decel. Not all the time ans not under load. I'm going to check compression now.

So the problem is low compression on the number 6 cylinder makin about 50 psi. All others are around 150. So my questions are what would cause this? what can I do to fix it and will I do damage by driving it this way?

Is there a way to diagnose the cause of the low compression without tearing it apart?