Thanks to all for the feedback.
FYI, this is a rebuilt engine I purchased from one of the usuals, of which I have not yet taken possession. After installation on initial startup apparently there was significant valve train noise, hence the long pushrod determination.

They have advised me that their solution is shorter pushrods, and my main concern continues to be excessive compression.

Rod

 

I would not want to own such an engine.
Higher compression will cause pre-detonation and will blow the head gaskets again.

If you can avoid this engine then do so.
Don't take delivery of the engine.

There was a 2000 d2 on craigslist.org in LA.
I missed it.
Guy had done the heads too.

My point is -
You may be able to get a WHOLE NEW used rover and not deal with this distorted out of spec engine.

 

tell them thanks; but no thanks. they can take it back, get custom push rods, quiet it down for someone else.
why would you buy a rebuilt motor and then have to go chasing custom parts?

 

[QUOTE=jfall;457373]I would not want to own such an engine.
Higher compression will cause pre-detonation and will blow the head gaskets again.

"blow the head gaskets again" or burn a hole hole in a piston. Actually, that brings up an interesting question. The engine computer senses pre-detonation via knock sensors and modifies ignition accordingly. I wonder what happens in the case of extreme pre-detonation? There have to be limits to the ability for ignition modification. I wonder how the engine performs at the limits?

My options are somewhat limited at this point. I chose to have the engine vendor also do the installation. He presently has my Discovery, with the engine installed in it, and my substantial down payment.

 

I wouldn't be too freaked out. If the heads and block were milled to the point that the compression was too high for the engine to survive I would expect the manifold to be difficult to seal up. I also would expect the compression wouldn't be so high that it would blow the head gaskets. These engines are built with turbos after all. Shimming the valvetrain is not abnormal for these engines, although the fact that they never checked the clearance in the first place might make you wonder a little. Does the engine come with a good warranty?

 

Tell him to keep the Discovery.
If your payment was on the credit card - tell them to return the money.

If you can get a whole Discovery for $1,500 to $2,000 with a good engine then this is what I would do.
Prices in the LA area have fallen and some special deals do exist.

MY bet is - if you take delivery you'll have problems in 6 months.
Hope I am wrong but..