Originally Posted by killercanuck
Aside from some foreign crud like GearNut pointed out(which may or may not have done any harming damage), it looks like you've had a substantial leak on your head gasket too.
Look at your head-gasket seal from one side to the other, and the trail of leaking sludge out of the exhaust side:
Your head and jug will need a good lapping.
You should pull the jug to make sure theirs no nicks in your rings that match the groove that GearNut pointed out too.
If you don't know what lapping is, get a wettable sheet of 300+ paper on a piece of glass(flattest surface readily available, don't use wood or steel, too many hidden imperfections) to lightly flatten out your mating surfaces. on the head, as well as the jug.
Pro-Tip: the more you take off after a proper "true surface" only raises your compression, but don't go nuts your first time around.
I thought that looked like a leak, the underside of the head shows it too between my hand and the plug.
I was expecting a heavier deposit or more sludge than what's there.
Okay, sounds like I have a plan for tomorrow then... pull the jug, inspect it, examine the piston and rings, clean the head surfaces and lap them, reassemble if everything's good...
I have some (red) gasketmaker, is that a bad thing when reassembling one of these? I can pull a (factory) head gasket out but am without access to any other resources right now, except for stuff from the recycling bin.