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I am on the east coast so any decent engine will need to come from California. Help!
No, the best engines are shipped from East to West.... Not the other way around!
You need to verify the integrity of what you have before just ulling out out and going through it... Many times when that occurs and a replacement is purchased from a mass producer, your old core is a BETTER ENGINE than the new one.
The integrity of what you have can be judged from leak down and compression tests and a few simple procedures to help gauge valve train wear.
If the engine has leakage issues it may have high crankcase pressure and that can be caused by many things within the engine and even the exhaust system.
I agree with an above poster, take the car to someone who knows the 914, Like Chris Foley from Tangerine Racing. When trying to figure out what needs to be done its important to get second opinions and its also important that those offering those opinions are specialists with your car- not just some guy that works on import cars.
It sounds like you have done a really good job on the 914 and you need to remember that the engine is the heart of the car. If the engine sucks, leaks, smokes or can't provide solid reliable power the car is worthless...