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The parts price seems reasonable (labor is not bad either, valve guides are a PITA to do...) When I rebuilt my D198 (4 cyl) head last summer, it took about two hours to do, but I didn't have to replace valve guides. Parts in my case were just the gasket/seal kit (so less than yours), but overall...
IMHO, this may be normal. Remember these engines don't have glow plugs, don't have a heated air intake, and so are temperature sensitive. As well, they are incredibly old technology, and not nearly as efficient as newer diesel engines.
180 out and run. Not likely! :mrgreen: The main issues is...
IMHO, many do this, especially if unloaded. Did you have a good load on it? When cold mine smokes (smells of diesel) and I know that in the past it wet stacked (cylinder number 1 mostly).
I'd suggest getting it under load (10KW if you can) and run until it warms up and see if the smoke 'goes...