Need help with my 2.0, problems with engine Options

[ChristopherB]

I bought my 914 last summer and have some problems. Everything I know, which is not much, I have learned reading this great forum since then. I was looking for a fun affordable Sunday driver. I love the look of my car, and it is great to drive. However, I started having problems from day one, and the engine is coming out this week for further examination/ rebuild.

Here is the info on the engine from the PO who did a rebuild about 6K miles ago.
2.0 with original D-Jet
Web Racing FI Cam with hydraulic lifters and push rods
Big Bore throttle body from High Performance House
Heated O2 sensor with air/fuel gauge
original heads rebuilt with new valves ported and polished
case steam cleaned and align bored
Remote sender for oil pressure
Mahle pistons , new rings and sleeves

There are a lot other items done to the car unrelated to my engine woes. You can see the ad here: http://www.914club.com/bbs2/index.php?showtopic=269159

My problems are numerous.
A local shop tells me cylinders 1&3 have low compression and engine needs a rebuild.
This sucks but I am resigned to the fact and am preparing to take on the challenge with a neighbor. I am preparing the engine for removal and it will be out within a week.
The PO indicated that the vac unit on the dist was not working. His mechanic had it tuned with the vac line going to the advance side when it should be on the retard side. I tried switching it but the car would not idle without stalling.
The car has very high crankcase pressure on start up and blew the cooler or the seals 2 weeks ago. The car has oil leaking from the push rod tubes even though the seals were replaced recently. Front main seal is leaking. Pretty much everywhere.

I am confused about cylinder and piston choices and sizes. What is what? Is a 2.0 engine 2056cc and not 2000? And what would be good in my application? I would like to get 140HP if I am going to do a rebuild.
Can I eliminate the stock cooler, and run only a remote cooler?

I have spent a lot of time reading build threads and searching remote coolers, but at this point it seems daunting.
I just purchased the following from a member here;
"Stock distributor from my 73 2.0L with functioning vac advance, Crane XR3000 electronic ignition, MSD rev limiter, Crane Fireball LX91 ignition coil, cap and rotor".

Should I start by purchasing the Raby rebuild video?

I am really bummed to have these problems with what I thought was a solid car, and am really bummed I am not enjoying the nice weather.
I am located in Towson, Maryland if anyone wants to recommend shops, mechanics, or better yet offer help or services.