Found the problem. Head gasket had gone. Whilst the head was off I got it skimmed. I then de-coked it, lapped the valves. Cleaned, put it together. Finished it last night, started on the button, runs sweet as a nut !!!!!! Also found its a later 5 bearing crank engine.
 
I had no compression on 2 and 3. When I took the head off I found the gasket was broke between 2 and 3, hence no compression.

Took it for a 100 mile drive around Exmoor today. Was running really well, apart from when I coast down a hill in gear it backfires but when I put the throttle on, it stops! any clues?
 
try advancing your ignition a tad (turn distributor clockwise)
or check for air leaks at the manifolds :)
 
If it's just a bit of rumbling or mild popping and farting it doesn't do much harm...I like it giving a bit of pop on the overrun, gives pedestrians a bit of warning...
 
I turned the dizzy clockwise a bit and the backfiring was even worse. Went deaf after a jolly round the block, will retard it a bit. Really need a strobe to get it working like a Swiss watch.
 
Remember its no use testing any adjustment unless the engine is up to full operating temperature. You still need to use the choke in summer until its warmed up or it will shotgun!
 

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