Reply to "Need help from the brain trust"

I'd take the valve cover off on that side.  I'd check that push rods are operating correctly (aligned), that the rockers go up and down - with valves as you manually turn engine over.  Then I'd adjust the valves - that might show a broken/stretched valve stem - if one is way off. 

#3 exhaust used to be the one that went first on VW since the oil cooler blocked flow to it.  You want to catch a broken valve before it beats a hole in the piston and spreads shavings throughout your oil galleries and bearings.

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