I am looking for more opinions on this 2.7 case., Cut off wheel did it's damage. Options

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Gentle Teeners,

I bought a 2.7 running engine that was in a 911, recently pulled, and brought to Hershey for me. As an old used engine, I was expecting to tear it down and inspect everything so I could evaluate it's usefulness as a rebuild engine to base a conversion around.

I got it on the stand and started cleaning and found this 1" cut underneath the cooler mount area. It set me aback.....


There is a cut in the case that looks to be made by a cut off disk. Someone got overly aggressive with an exhaust piece or something and ground into the case.





It looks to be about 3/16" deep. I have not measured it yet. It does not enter the case, it is not through the case. For all I know the case could be 1" thick here or it could be nearly through.

My question is, does this ruin the case? It is not near the head stud area, and I have been told it is in a low pressure oil bypass area. I am not sure how thick the case would be there? Could it cause a stress point that would fail in a freshly built engine and start a crack? This is a magnesium case so I would need to know if it could be welded with success as well.

I showed it to the guys at Rich Towles this weekend and we have an opinion, but I would like other engine builders out there to comment before I invest heavily in a conversion around this engine.

Hopefully Jake and others that build engines regularly will see this and give me their opinion.

Thanks
John