The progress continued and the head is now off. There is a split in the liner in cylinder 2. The piston crown is quite clearly washed out and a palpable crack is apparent.
Attachment 30179
Attachment 30178
I am going to clean up the head and get rid of the gunk - and get it tested.
As for the block - I have read about Colin's repair but I am still a bit dubious about reassembling on a clearly dodgy cylinder. So I can get another block and have it engineered for the wiseco oversized pistons (would new piston rings be needed?) - or go the more expensive route and buy a set of darton liners?
I am uncertain that the oily watery mess is caused by a split liner? So it may well be that both the head is cracked too. I am trying to remain positive.