I took my engine apart!

The OP doesn't give a reason for dismantling the engine in the first place but references to oil in the coolant suggests this might be it.
That being so, and given my lack of experience with Volvo engines...excuse me if that is reflected below.

re the head gasket being suspect;
Surely pressurised oil feed is conducted to the rockers by external oil lines rather than internal galleries sealed via the head gasket? If so then the head gasket is most unlikely to be the culprit as all the sealing it has to do from oil is allow it to drain by gravity back to the sump. Oil can't get into the coolant this way as coolant is pressurised and returning oil is not. Even given pressurised oil supply via galleries if the head gasket is such a poor fit that it allows oil at one bar into the coolant it isn't lileky to be sealing cylinder pressure at fifty, so you'll be far more likely to see a combustion burnthrough to sump or coolant than a mere oil leak which won't actually leave a visible trace anyway...

Cracks/permeability in the head are another matter. Bloody hard to check that though. Specialist help needed if that is suspected = £££

Oil cooler. Well, cooled by what? Closed cycle fresh water? Then a possibility; but if cooled by raw seawater then it has nothing to do with it.

Skimming a diesel head...careful! That's pretty hazardous territory and not able to be done on many if not most engines. A careful look at the workshop manual is required before contemplating anything as drastic as that. Maybe you can on a Volvo, I don't know.

Bores.
Despite what has been written above bores are never cut tapered as far as I know, they are always parallel unless maybe you're talking about a Formula 1 engine. Taper develops due to uneven wear between the top of the pistn ring travel and the bottom of the bore, ie between the wear lip at the top and the necessarily unworn bore at the bottom. The OP has not mentioned a lip at the top of the bore but this is a critical to understanding the wear in the engine and its limits are defined in the workshop manual, but he has said that the bores look shiny which is not ideal though it says nothing about any lip or wear near the top. Usually a lip is so obvious it gets mentioned. The "1500"hr (I suspect double that) Yannie I recenty rebuilt had no discernable lip at all as you'd expect in a diesel that had been run with fresh and good quality oil.
Ideally the bores even on a 'mature' engine should still show appreciable helical scoring marks of the original bore-cutting. If none are present and the bore is shiny and reflective it needs honing to restore a scored, non-reflective surface that will retain oil as the rings pass by. This requires the big ends to be undone and the piston-conrod assemblies removed from the engine. It is an easy process for a diy mechanic but requires careful housekeeping to ensure the abrasives used are flushed from the engine entirely. It also requires a new set of piston rings, cheap enough from Parts4Engines or similar suppliers. A ring slipper and rotary honing tool will cost max £40 from Amazon or Ebay if you can't borrow them.

That said if the engine is a good starter and doesn't smoke then why disturb it?

Big End play.
Hard to judge by hand but with diligent inspection you can usually tell whether there is any up and down play in the big ends. Any is too much. Be reassured that the usual reason none is readily found is because none is usually present... Just 'dropping' a big end or two for inspection is, imho, a silly thing to do as you're likely to do far more harm disturbing something that was previously working just fine than you are likely to discover anything wrong with it by eye. (They seldom seem to go back exactly as they were before they were disturbed - think of it as investigative surgery on your grandma, a very last resort.) A little scoring on a big end shell is no big deal as long as it s only a little and wear cannot be accurately measured without using proprietary compressible thickness gauge strips which is 'something' of a hassle unless you really suspect wear is present. So what can dismantling the big ends unnecessarily tell you? But beware opening Pandora's box... If the engine has been running healthily and not exhibiting excess noise then leave these things undisturbed - if it ain't buggered then don't bugger it about is a very good maxim. Get yourself all over-enthusiastic and decide the big ends need replacing and your rebuild suddenly goes Heisenburg - an unstoppable chain reaction. What started as a mere spanner exercise (albeit with a bit of technical diy like honing and new rings) suddenly turns into a full-on production of engineering shops, finding oversized bearing shells, dismantling the entire engine, buggering up injector pump timing, realising that main bearings need doing too (ha'pence of tar principle), then thinking the same of the camshaft. Then the camshaft bearings, then doubting if its sensible to put an old oil pump back in there...yada yada yada.
imho if you need to go deeper than a bore-hone and valve lap it's time to get a new engine and sell the old one as a runner on ebay.
That said, of course if you need to hone the bores then its big ends off regrdless but --- BUT you're now into a regime of almost clinical hygiene and rigid procedures to ensure that every component goes back exactly where it started from, right way round and every piece is reassembled mating exactly with the exact same piece it lived next to before you disturbed it - or else...Tho with good workshop discipline and a bit of planning and labelling it isn't hard.

As for painting it! Well, you'll need it get it out of the saloon for a start. Then when the rebuild is complete and it's far too heavy to put it back the way it came out (in bits) you can steam clean it, if you have a steam cleaner. If not the paint won't stick for long - pressure washing and 'degreaser' won't cut the mustard...But why bother, it isn't a movie star?

Just keep the injector pipes rust-free, that really is critical.

Heck!I must be bored, writing all that.

Well, perhaps some of it is useful to somebody!
 
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Depending on the tools & information you have (good torque wrench and engine manual), and your confidence/ability, I would drop a couple of bearing caps (mains & big ends) and inspect the mains, bigs and thrust bearings for wear.

Whilst you have the engine down this far I would also replace the front and rear crankshaft oil seal simply as good engineering practice. If possible, rotate the flywheel one set of bolts round so that the starter motor contacts the ring gear in a different place (an old trick but still works).

I wouldn't advise filling the cylinders with diesel - all it will do is make a mess. Cylinders/liners are bored as a taper, ever so slightly larger diameter at the bottom than the top - this is so that the liner becomes dimensionally identical once the engine is up to operating temperature (greater heat at the top of the cylinder will cause greater expansion in that area). Plus as it is a cold engine the ring gaps will be so large the diesel will just work past.

As mentioned in an earlier post, a small amount of end play (inline with crank) movement is desired (and required), but there should not be any movement vertically around the bearing journals.

If you have had oil in the coolant this is most likely from the head gasket, but a possibility could be an oil cooler if you have one fitted (it's been too many years and I can't remember on the MD21). Definitely send the head away for cleaning, measuring and pressure testing - the shops that do this are specialists and will be able to tell you if it is cracked or needs to be skimmed. Make sure they do hot pressure testing as some cracks only leak when up to temperature.

If the head requires skimming then I would get a proper straight-edge and also check the block face for bow & twist - a straight head on a warped block will still leak!

Regarding painting - it's expensive but the genuine VP green paint is very good. Some good primer and this and the engine will look like new - if you can get over the price tag per can! ;-)
"Cylinders/liners are bored as a taper" really?
 
The head-gasket looked fine on both sides. I had an issue with the coolant increasing in volume when the heat-exchanger was allowing seawater into the coolant, (loose endcap) therefore if there was a leak in the oil-cooler, there is another explanation for the oil in the coolant.

Diesel heads are routinely skimmed, i have had at least four done over the years. ( I think it is mainly about getting a clean surface without too much exertion but if there is a bit of corrosion then I think it is a good idea.)

I also had concerns about the internal state of the engine and the inaccessible bits which were showing signs of corrosion, thus the decision to take it apart, I wanted it out to do the soundproofing and to remove two thru-hulls and to tidy up wiring so plenty to do, and plenty achieved already in terms of ruling out potential implosions...

Sunday will reveal more...
 
"Cylinders/liners are bored as a taper" really?

Yes. I did my apprenticeship and first few years of work at Sabre (Perkins), where we used to machine the blocks for the Ford Sabre engines. Sabre, Perkins and the Seatek engines were all bored to have tighter tolerance at the top of the cylinder than the bottom. This was due to increased temperatures (due to combustion process and as the bottom of the cylinder gets greater cooling from lubrication) at the top of the cylinder causing greater thermal expansion.

Factory tolerances almost always call for a small amount of cylinder taper, it's less on modern engines due to tighter tolerances and improved design, but on an older design engine is much greater. I can't remember the specs now - and it's a moot point as the Sabre specs will be different from the VP ones. But if you have a proper bore micrometer it is measurable.
 
Well worth getting the Haynes 'Peugeot 504&505 Diesel Engine' manual for the base engine if you don't already have it.
Lots of useful rebuild info e.g. it makes reference to 2 different thicknesses of head gasket available and how to select the correct one.
It's a really useful addition to the VP workshop manual for an MD21A/B owner.

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I though I might provide an update and importantly a source for parts for Peugeot based engines. 505 Bas moteur diesel et turbo-diesel (9) - SERIE04 SARL

These guys are French and seem to not understand english so a little difficult to deal with but steady 3 week turn around and very cheap with good quality parts. (King bearings and glyco etc)

After I had checked the bearing shells all seemed fine until pulled out the pistons and found one bearing badly scored with a foreign object embedded...
Reluctantly I pulled out the crank shaft and found one shell also damaged in a similar fashion....

I found it strange to see damage on two isolated bearings with no damage whatsoever on the shaft. Or even the opposite half of the same bearing!

In any case the putting together begins Sunday morning...(In accordance with sods law I have become busy with other matters) head has been skimmed, cylinders lightly honed, new rings fitted new oil seals etc etc....

I am going to pump diesel through the crankshaft juts to see if there is some grit or something living somewhere..
 
Yes. I did my apprenticeship and first few years of work at Sabre (Perkins), where we used to machine the blocks for the Ford Sabre engines. Sabre, Perkins and the Seatek engines were all bored to have tighter tolerance at the top of the cylinder than the bottom. This was due to increased temperatures (due to combustion process and as the bottom of the cylinder gets greater cooling from lubrication) at the top of the cylinder causing greater thermal expansion.

Factory tolerances almost always call for a small amount of cylinder taper, it's less on modern engines due to tighter tolerances and improved design, but on an older design engine is much greater. I can't remember the specs now - and it's a moot point as the Sabre specs will be different from the VP ones. But if you have a proper bore micrometer it is measurable.
Yes. My MGB engine is one such (the BMC B series engine was used for many marine conversions). I just fitted a new piston and whilst being standard bore I did check the piston clearance at the top and bottom of the cylinder. Just for interest. The ring gap increases the lower down the bore you measure it.

Re. the OP. I can't think of a greater waste of time to strip an engine and not inspect the bearings, journals and check the clearances and condition of the oil pump vanes.
 
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