[tsupranami]

I see you found the oil leak. Valve covers dripping down back and front and into the plug galleys. ITYS!

Compression when cold should be above 120-125psi. The absolute value is not as critical as the differences between cylinders. Any more than 10% difference warrants further investigation( ie. wet test and leakdown).

Oil on the plugs after finding oil in the galleys is what the 7M engines are all about! lol! It's usually just the residue around the sparkplug gasket area that drains into the hole and onto the plug-end as soon as the seal is broken upon removal.

But...playing devils advocate here...in the worst case scenario given the info so far...

FOD to the turbo could have damaged the seals, which would cause increased blowby. Especially if it has run that way for a while; the imbalance will screw-up the seals quickly. Valve stem seals get hard and also contribute to blowby. Rings hardly ever wear on these motors unless abused or well over 200k mi., as well as valve guides, so not likely suspects.

So probably not a big deal motorwise. If the compression is good and even across all 6, just fix the turbo and the valve covers, and if there's no smoke out the tailpipe, you're good to go. Just watch the boost on that stock HG.

I went through mine several times, from the cheapest (and quickest) fix to currently one of the most expensive (full rebuild).

First I tried just replacing valve cover gaskets. That kept the oil in the engine, kind of, but I kept painting my rear bumper with oil from the blowby in the exhaust.

Next was a simple disassembly of the head. I had an exhaust stud hole welded and repaired, the head surfaced, and valve stem seals replaced for $200, including assembly. Just a cleaning and surface shouldn't run you more than $100, if you assemble the head and fix any messed-up studs yourself. An OEM headgasket set is around $160, aftermarket under $100.
Toss or sell the fiber-style HG that comes with the kit. I'd use the box the gaskets came in before I'd use another stock-type HG!

I installed a Titan 1.5mm MHG w/ARP head bolts for about $250. Oil painting the rear bumper was drastically reduced, but not eliminated entirely. That lasted for over a year 'till I had the turbo rebuilt and upgraded ($850). That was the final step in eliminating oil consumption and a greasy back bumper. A few hard runs at over 16psi had the coolant shooting out of the reservoir, though. I only cleaned the block (no machine work), so it was no big surprise.

I lived with that mildly blow head gasket for 2 more years (~30k mi.), and as long as I kept it under 14psi (or only breifly exceeded), it wouldn't overpressurize the coolant system. I drove it to Vegas in September and Montana in early October with no problems. It pulled 300rwhp/292rwtq on the dyno and ran 13.98@105mph (@14psi) in the 1/4mi. just days before I pulled it for a rebuild last October (crank-pulley keyway was chewed to hell).

All of this was done with the block still in the car for a little over $500 (not incl. turbo upgrade).

With a little careful shopping, you could do it for less. With a block in better condition than mine, it should last longer, too. Mine was pretty FUBAR. I really shouldn't have gotten as far as I did!

Good luck!