Used engines are a risk. I'd hope the shop would compression and leakdown test to verify bore scope findings.

Good luck man.

Your motor does not use Nikasil. BMW stopped using it late 90's. You can have the alumisil block boarded and refinished. Unsure if the 4.8 block can be overboard. The alumisil process is reproducible if the block can be boarded. Check the Porsche sites, they talk about it. There are some other good articles on it also.

Thanks, I'll look into that now

The smoke issue you describe can be valve seals as well... How sure are they about the cylinder wall thing? Maybe trying to pull a fast one?

The only way to diagnose properly is to pull the head/s. it's not an overly complex or expensive job, considering what is at stake.

The 2 hoses I have going from the valve covers to the intake manifold have oil in them, a lot of oil in them. Dealer replaced both pcv valves over a month ago in their quest to find my smoking problem. Does this happen with scored cylinders? I put a scope in cylinders 1 and 3 and the scratches I would call very very light, like a ball point pen drew on them. And I found out that a "new engine" is only the bottom half. That's gross for $20000.

Compression test booked for the 10th. They agreed the oil in pcv hoses didn't really line up with scored cylinder walls diagnosis. Fingers crossed.

Compression test on the original engine or the replacement you mentioned?

The original, used isn't an option I'm allowed. So says warranty.

Problem not all that unusual for 4.8. I don't recall anyone posting the engine needed to be replaced with your symptoms. Some corrected problem with different oil, some with work on the PCV system and some with new valve seals. Unless the engine had a major failure that could score a cylinder, I doubt the engine is gone.

Good that you are testing existing engine before buying anything. I would go to well recommended Indy to have the tests done.