So I finally got my '95 Discovery tonight, and am giving it a good once over. I bought it with a blown headgasket, and a damaged piston. I am currently trying to decide on whether to try and repair this engine, or just buy another one.

Do you guys think I could hone this out? I don't think so, but this is the first I have ever seen damage like this.

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You can't hone that out. If you can't find a block, pop out the sleeve and replace it, then deck the block.

 

You can pop the liners out?

 

Yes. There is even a defect i believe in an earlier Rover where the sleeves have
slippage issues, its fairly common..Just make sure the person who does it or if you do it, you seat the sleeve all the way in. You don't want the lip sticking out, that is why its good to zero out the block and deck it. You will get a nice tight seal when you replace the head gasket.

When i did mine, i had the heads and block decked to a mirror finish, it looked beautiful