I had a look over the engine tonight.
I have a military style breather, a sort of primitive cyclone. There was some oil in the cyclone so I gave it a good clean with paraffin and then dried it. There were a few drips of oil in the inlet manifold where the breather pipe connects (my breather does not go back to the air filter). No dramatic quantifies of oil and nothing blocked.
I started and ran the engine without the oil cap and breather assembly. It started on the first half turn and ran perfectly. There is a slight blue haze from the oil filler, but no heavy breathing. There is a definite smell of burning oil and slight wisp from the exhaust.
There is an external oil leak from the front of the manifold. Looks like it's from the first exhaust port. There was no oil lying in the inlet manifold. I know there is not supposed to be oil in the exhaust manifold, so if there was, would it leak past the seal? If not then the oil must be leaking from the headgasket (looks like it's above it to me).
I replaced the breather etc and ran engine again, all good again.
I'm still leaning towards a head problem. Valve oil seals or guides. I suspect this head was probably lying around in a barn for many years before being chucked on - no doubt with 20 year old oil seals left in place that would have cost £2 to change.