History:
Bought the car in 10/22 with 108,000 mi (now has 109600). It has an APR tune and running full e85, but I rarely get on the car. Found out afterwards that it consumes 1qt at around 750 miles. A week before the engine failure got a misfire code on #1 and #2 when over taking a car on the freeway with about 2/3 on the throttle. Cleared the codes and ran fine.
The day the problem started, I was getting a cat back exhaust installed. After it was installed I did a test drive to hear the exhaust (about 3/4 throttle, 20-50mph run). When I got to a light I noticed rattling of the muffler in the rear and some smoke from underneath me and it also sounded like there was an exhaust leak. Drove back to the muffler shop to get the exhaust readjusted. Installer said the smoke was coming from the vaseline used on the slip joint.
Started the car up and the motor had a knocking sound (similar to rod knock) so I took it into a European specialist around the corner to get it checked out. Their initial diagnosis was that the knocking was coming from under the valve cover and that a rocker more than likely moved. They wanted $1200 to remove the valve cover and confirm. I decided to tow it to my home and do it myself.
After getting the valve cover off and inspecting the cams, rockers and springs, I didn't notice anything abnormal and plugs looked ok. I decided to buy a borescope to investigate further and what I found was somewhat shocking to me. The intake valve on cylinder 3 appears to have a hole in the center of the valve. I'll post a pic of it. The left side of the pic is with the boroscope camera pointed down into the piston and the right side is the second camera pointed to the intake valve closer to cylinder 4.
What are chances the motors destroyed? HELP!!
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