Serious engine problem

I agree... sounds like air sneaking out from between the head and cylinder, tightening the nuts back up should have you up and running again. Sometimes these need to be re torqued once or twice before they stay put.

Hey Bandito!

To loosen up the head bolts try some wd40 or any penetrating oil overnight. As to why the gasket blew and the bolts are still very tight it could be that the mating surfaces of the head and the top of the cylinder are a little off. Once you get the head off you can cure that issue by sandpaper milling those surfaces to get them nice and even. There's a number of threads regarding this procedure. Or maybe the gasket was faulty.

good luck

Since doing whatever work you already did, have you:

-Verified spark?
-Verified compression?
-Verified fuel?

-If it's not getting spark, check resistance of the magneto. Shouldn't be zero or open. Something in between. I don't recall the exact number of ohms, but if it's open or shorted, it won't work. If the magneto is good, it's probably the CDI. The spark plug, boot, and wire are notoriously bad. So are the CDI/kill switch connectors.
-If it's not spark, check that you have compression. This isn't hard to do. Is it really hard to spin the engine with the spark plug in? Is it easy to spin without the plug? Boom. You have compression.
-Carburetor. This one's tricky. If the bike ran but suddenly doesn't, it's probably not the carburetor. If it got clogged though, it's possible. There's not much to the NT carbs, so it's easy enough to pull apart and clean.

The snapping/cracking noise leads me to believe a backfire may have happened. Is the magnet still keyed in the shaft? It could be free spinning and getting a weird intermittent spark.

My diagnosis is you blew the rings/cylinder. Perhaps one of the ring-retaining pins loosened up and got pinched between the piston and cylinder-wall. It would also allow the ring to revolve in the slot and start smacking the ports. That'd explain all the awful noises you heard...it'd also result in loss of compression. I suspect your fouled plug occurred AFTER the damage: unburnt fuel. Did your mechanic not remove the cylinder for inspection?

So no spark?

Just so we're on the same page...

This is a "head":


This is a "cylinder":


Did you remover the CYLINDER to inspect its walls as well as the piston and rings?

RE:

Hate to say it, but I'm going to agree with Kioshk.
Sounds like a classic ring snagging a port and breaking stuff.

If you need a place to hold your images, you can set up an account with Imageshack.com and link the images into your posts in here... There are several other free image hosting sites you can use as well and most of them have an easy way to resize them for forum posting...

Back to the issue at hand... What does the inside of your cylinder look like with the head off and the piston all the way down at bottom dead center? Are there any scratches in the bore, any plating peeled off or missing? What kind of compression pressure readings were you guys getting when you checked the compression?

If you snagged a ring you'll have some nasty scratches inside the bore or some gouging at the ports etc, if it looks perfectly mirror smooth with some minor scratches it could be from dust and dirt making it passed the stock air filter, and if the bore looks perfectly mirror smooth with no scratches or plating damaged or missing it's possible the cylinder glazed before the rings seated which can cause some poor compression with no damage or gasket leaks etc...

Since you're saying you lost spark tho, let's look there first... Do you or any of your buddies have a multimeter? do an Ohm check from the black wire to the blue wire coming off your magneto with the CDI disconnected, look for a reading between 300 and 500 ohms, it can read higher or lower and still be good, but you don't want a really high or infinite reading meaning you got an open circuit or broken wire, and you don't want a really low reading like less than 100 ohms (give or take) or close to zero, or zero... this means the coil has a short somewhere in it and the mag coil is no good.
A good mag coil should read between 300 and 500 ohms (give or take up to about 100 ohms in either direction).
If the mag coil checks good, then check the CDI by plugging a known good one into your circuit and check for spark. If you got one of those plastic spark plug boots it's also possible that's the problem. You can un screw the boot off the wire and strip about 1/2" of the insulation off the wire then clip the bare wire to your plug and see if it sparks, if the plastic boot is the problem get a terminal and boot for an automotive spark plug and crimp it to your wire, slide a rubber boot over it, screw on one of those little snap adapters to your spark plug and clip the new end onto your plug... Lots of info on how to do just that.

I don't get why people are telling you you got a broken or snagged ring if compression tested good and you have no spark???