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I found this photo online of a special tool to hold down the cam when removing/instaling.
I don't have one, so I guess I will just loosen each bolt slightly...
With the cams out try a leak down test on the cyl with 0 compression. I also note it is the GLE twin cam so I would suspect maybe a bent valve unless there wasn't a valve adjustment and you burned an exhaust valve.
Taking a look at the piston damage it makes me suspect someone did not do a proper belt change and some of the valves hit the pistons. The GLE twin cam is an interference type engine where the valves can hit the pistons if the timing belt breaks or is put on incorrectly.
that anaerobic sealer is for the whiteblock motors, I thought? they use no gaskets other than the head gasket, just sealer for the 'valve cover', and oil pan. whiteblocks are built like a sandwich, the valve cover is in fact the uppers for the cam bearings, and the lower block piece is the lower half of the crankshaft bearings.
So I opened up the hydraulic lifters, as you can see in the photo the piston is very dirty. Most of them were really hard or stuck, others moved freely.
I'm cleaning them the best I can, without opening up the valve check because there seems to be a clip holding the plunger and I dont want to damage it trying to remove it.
Some people say to soak them/fill them with oil, others say leave them dry and let them fill in when the engine starts running. Opinions?