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I would try something like sea foam in the fuel and drive it before replacing the valve seals. Possibly the rings are gummed up and you could get them cleaned up without major work. Maybe even some in the cylinders though the spark plug holes and let it sit for a while. Valve seals in that late model (relatively) engine are pretty durable. Probably carbon fouling and sticky rings. It would be nice to fix it without talking anything apart and I thinks your odds are good.
Is the engine the later 1.5 with timing chain and dual overhead cams?
Is the transmission 4 speed or 5 speed.
The two should be interchangeable, and there are other alternatives, but unfortunately most were never brought to America and could be difficult to get here in the US.
regards
Mech
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