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Because it was torqued down over that much protrusion I can tell you without looking at it that your head is not flat. At the risk of sounding like a smart arsed know it all this is one of those deals where if your only going to go halfway as in not correcting the protrusion than just leave the head alone as your just wasting time and money if you mill it flat. Excessive liner protrusion (to an extent) very much helps to seal the highest pressured joint in the gasket, the top of the liner. Problems is its harder to seal the water jacket. The head bends down around the sleeve when you torque it down and with a little goop around the water passages you wont leak any water. This works OK until you take it down for decoking, then you need to have a head gasket on hand because the gasket is ruined during disassembly. If your going to put some hours on it and thus disassembling for decoking you would be ahead to get that protrusion down to .001-.003 if your using Indian sandwich gaskets or .000-.001 if your using the Gaskets to Go modern type with fire ring. Then you will need no goop and it will come apart without ruining the gasket. The difference in spec here being you need some squish to hold the liner down tight with the Indian gasket, it is built into John's gaskets via the fire rings. Also if your going to pay someone to correct the protrusion my suggestion is to have a machinist make the correction in the counterbores in the block instead of sleeve. This is because the Indian sleeves are real consistent in my experience and come overhaul time you can drop one in and it will very likely be OK. If you correct the sleeve plan on having to do same to your replacement sleeves come overhaul time. Just some things to think about
This is a new unused engine I have and the wrist pin should not have that much of a gap in the bush . Just goes to show how the Indian tolerances are less than we should expect them to be .