2G Leaking AND burning oil

[Talyn]

Bought a 96 TSI AWD today, from what the owner I bought it from said, the motor was rebuilt by the previous owner, with a 6 bolt shortblock, and the original non-rebuilt 7 bolt head, there is visible evidence that suggests it may be truth, though I don't profess to know for sure if its true or not.
Well when I drove it yesterday it was fine, I did not notice any smoke, but when taking it home, I noticed smoke coming from the hood, thought it was coolant at first since he told me the crossover pipe is leaking a little bit.

Well when I took up to work, it stalled while pulling in, and there was a decent amount of oil mess, it got on the timing belt which threw it around some, and it also got on the VC between the cams. A buddy helped me find the reason it died, which is the ignition pack connector pulling loose because the clip was broke. But I am unsure as to what is leaking oil since it was everywhere, and it seems to have begun burning oil at the same time, smoke is blue and in decent quantity.

If the motor was rebuilt on the bottom end as I was told, and done right, we can rule out piston rings(though I am not ready to rule it out yet), I pulled the intake pipe and didn't find oil, which rules out the turbocharger. I feel like the leak and burning may be related, is there anything that can cause both problems or do I have two issues?? I know valve stem seals is a possibility, but I really feel like the two problems are related.
Would love some input, tomorrow I am going to do a leakdown test and see if the rings are good. Hopefully there is a common link, and its nothing big.
Also forgot to mention that he said it has an MLS head gasket, so shouldn't be that either, again, provided it was true. Which I don't particularly doubt what he told me, since he told me about a couple minor issues that weren't readily apparent. But at the same time, something is fubar, and I don't know who did what on this thing. Also when it stalled out I checked the coolant level and it was good, and I kept on eye on temp, so I don't think it overheated and warped the head.
I forgot to mention its burning oil even at idle, and the engine seems disaffected by the leaking and burning oil. Also it is holding decent oil pressure.

 

[DSM1G90]

What I'm curious why the top end wasn't overhauled when a bottom end is done. Usually when this happens, the motor is unbalanced with one end stronger than the other.

Head prob wasn't torqued down correctly, possibly warping the head causing the head gasket not to seat completely. You can try to retorque the head down, but do it in steps and torque range required.

Just wonder if it was a fast rebuild to rid the vehicle.....

 

[Talyn]

I went to top off my oil before going to work, and was greeted with the telltale signs of HG, or warped/cracked head/block. Coolant in my oil...I hope it didn't hurt it any on the way home, and that it just needs a new HG....

 

[garrettgoines]

In my opinion there is no way it would just be your head gasket. If your head gasket is leaking, there is a reason. Period. The head or block has been used/abused to the point of one of them warping somewhere, resulting in a leaking head gasket. It would be pointless (in my opinion) to replace the gasket and bolt it back up with the block and/or head out of specification unless you have another motor on standby and NEED your car to run right now.

 

[Talyn]

I am aware of that, it has an MLS gasket on it, if whoever put it on did not surface the block and or head properly, that in and of itself could be the problem, regardless I am going to check both the head and block with a straight edge, and will go to a composite HG and ARP studs, as I do not feel like, or have the money, to pull the entire engine and have the block and head resurfaced just to run an MLS gasket, unless of course it is warped in which case I have no choice.
Unfortunately I am on hold at the moment because of rain, which sucks, because I won't have time to work on it again until friday.