Thanks Steve.
To fill in the gap and bring this up to date, this project was pushed to one side for a few months for various reasons and restarted in September. Sadly, I didn't take many photos as I was more concerned about pushing ahead and getting the job done.
The pistons and bores were fine, and all the bearing faces in the block were fine (mains and thrust) so I dug out the crank, rods and shells from another engine I had spare with failed ringlands.
I plastigauged all the bearings in their new home and all were within tolerance - just. Since I'm only planning low milages, and being mainly for competition larger clearances are favourable I re-used the old shells. It's a fairly easy job to replace shells at a later date if plans change.
The engine all went back together with a new standard OEM clutch and thrust bearing. I'm working on the theory that a 2WD car will put much less stress on the clutch pulling away than the GT4's I'm used to so a standard one should be ok.
Although I would normally fit a new water pump, this one looked like it had been replaced recently and again, bearing in mind the low intended milage, I put the old one back.
I thought I would have a closer look at the bubbled paint in the sill prior to the MOT and gave the bubbles a gentle tap with a pair of pliers - which promptly went straight through with no resistance. A wee bit of tickling with the angle grinder later the extent of the rot was visible.
Judging by the 'tide mark' it appears that water gets into the sills and then lies there with no escape. Further investigation showed what appeared to be a drain hole which had been carefully covered with a sticky pad and then underseal over. Whether this is a factory thing, or whether it was done on import I have no idea.
Anyway, the inner sills and the higher parts of all the other structure was solid so it was a fairly easy job to cut off all the parts just above the tide mark leaving no rust of any significance. I then welded in new metal for the inner structure and coated it all in anti-rust primer and then a moisture repelling laquer. Finally a new section of outer sill was fabricated from a spare nissan micra sill I had lying about and butt-welded in to the hole. Finally the whole sill was sprayed internally with cavity wax, and the outside had a very thin skim of filler over the welds to 'hide the join'
Unfortunately I got so carried away doing the job I forgot to take pictures. The other side is showing a little bubble in the paint so i expect i'll be doing that before long and will take phots then.
I took it for MOT, which it failed on numberplates (size and stroke width) and numberplate lamps not working. (I always forget to check these for some reason). On re-test it went through with no advisories.
Driving the car, I'm very impressed with how responsive and well mannered it is when pushed beyond it's limits - also at just how quick it is in standard form. Certainly not a car for a novice. I'm looking forward to getting a bit more experience with it and doing some events.
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If at first you don't suck seed, try drier grain.