Oil leaks.

A leak down test will help. Pressurise each cylinder (valves closed and crank locked), and see whether any cylinder is leaking more rapidly than the others, if it is significant you can hear whether it is leaking into the crankcase. Head gasket will generally manifest with overheat/water loss and may be detected with a gas test of the air above the coolant, using a 'block test' kit (both are cheap from ebay, you need compressed air for the leak down test)

If you don't have the 2nd pressure gauge and restrictor to make a leak down tester then just pressurizing each cylinder in turn to about 100psi and looking for bubbles or rise in the coolant tank level with pressure cap off will show a gasket leak.

and you may hear ring leakage by listening at the oil cap.

Looked on Ebay for leak down testers, and didn't realise how cheap they were.

How much air do you need? In other words, does it need a full sized compressor?

a small one would be fine

Good - that's all I have. Been Googling on using one and looks like it might well identify the problem. Have ordered one from Ebay.

Just a question - doesn't the air pressure tend to push the piston down? Or do you have to set that piston at its TDC?

You do need to lock the crank with the valves closed, so a bit after tdc, then the rings will be back in the most worn area of the bore.

That doesn't sound a trivial thing to do.

Ah - bit more of a problem with an auto. ;-)

Not having yet got the device and therefore instructions, it could be it doesn't actually need much pressure. Plenty friction in a V8 ;-)

Found a U-tube video of one being used. Looks like it may be the answer to finding problems like this without major dismantling. Seems you can often hear where the air is escaping from.

not necessarily, a hammer handle in the alternator belt at the bottom pulley should do, or even a spanner on the bottom pulley, as long as you don't let it get a run up then either would do. if it has one, then you could drop off the lower part of the 'adaptor plate' to expose the ring gear.

and before anyone says take the starter out, it isn't easy !