I chased the engine so hard around the shop that it ended up ....losing lots of pounds.
However, I got some sad news too... I will have to replace the rings, and I'll definitely replace the valve seals.
I included a pic of the crankshaft for ***** and giggles...

 

I would very much appreciate some ideas as how to remove one check valve in the valley pan, and one relief valve in the bank1 - it just "happens" that bank is the one that started leaking...
Check valve: I unbolted the first one without trouble, this one it chose to get stripped (8M allen).
Relief valve in the head: driver bank's one got unbolted without any trouble.
This other one chose to get stripped after initially I physically broke a 10M hex socket on it. Next socket rounded the head. After that I forced a 3/8'' socket in it with a hammer and, although it felt good initially, it started spinning just like the bigger 10m earlier.
Any ideas? Again, it just happens that the stripped one is of course the one in the crappiest spot: in the upper "corner"...
Thanks in advance gents.

 

Hey sorry for thread jacking after looking this thread over I saw the picture of your upper oil pan assembly removed. Ive searched all over for answers but I cant seem to find if you need to remove the engine to access this gasket. If you have any input I would greatly appreciate it. Thanks in advance and good luck with the rest of your project!

 

078103609F

 

My usual way to do this is to use a dremel and cut a slot in the part just the right size to insert a drag link(straight screwdriver bit) socket and use an air impact wrench on it. Soak overnight with Kroil penetrant before starting removal.

 

grip-tite... My new best since vice-grip. When I used for a rusted grade 8 bolt, it sheared the bolt head off, but did not let go. Amazon sells it or any local parts store should have a set.

 

Thanks gents, I appreciate it.
I'll look into both avenues.
Tomorrow I'm taking the heads and the oil pan sections + oil pump to be cleaned.
The engine block will follow suit, as soon as I take the crankshaft off and that darn check valve.
It sounds like a proper size grip-tite socket may be even able to get that round-head check valve in the valley pan.
If not, Dremel is...
Thanks a-gain again!

 

Well, I took the heads over to the machining shop and I hope the guy will take that relief valve out for me.
On the valley pan check valve I used a chisle, banged it three four times in an angle and it came undone...thank god.
This evening I also took the pistons and the crank out. The engine block will follow suit on the cleaning trail tomorrow. I hope the guy can finish everything by next week, although he's pretty busy with the farming season that just started (or starts...). It is the only machining shop in town. I'll keep my fingers crossed.
I need to buy a new set of rings and I'm disputing in my head if I should get a new set of (connecting rod) cap bearings or not. They're not looking bad at all. The journals are looking like they just came out of the factory! - 167,000 miles.....damn.

 

The block is freaking heavy even if it's stripped... short and stout. How the heck they can pack 170 hp in this little thing I have no idea....German engineering!

 

I took the block and the pistons to the shop as well.
One head was in the cleaning machine already! Sweet... The guy showed me the valves: he said the intake valves are looking excellent, while the exhaust ones need some grinding.
I'll get new bearings as I don't want to be a cheapskate and later on if developing a noise or else to say " I wish I would have spent those extra $ 150 for new bearings"
Will keep updating the thread.