migmog:
What is this fixation you have with the OP having oil in his water/water in his oil. He say's he has no oil in his water, you post about oil in water.

He say's he has no water in his oil, you post about oil in his water/water in his oil.

Loss of compression is caused by the loss of seal in the combustion chamber. We know that already, it's just a case of finding out why this has happened. It could be loss of compression between fire rings on the gasket, either between cylinders or outwards towards a water jacket. Between cylinders would match the OP's compression readings on 1 & 3 and 2 & 4 but so would valves not seating correctly due to an
unknown to us incident, hence other members suspecting timing issues.
So far you have had the OP's car with oil in his water, water in his oil and overheating, yet the OP has mentioned none of those symptoms. Believe it or not we are trying to help, and you just quoting from books you've read isn't helping the OP. We know what the symptoms are but we haven't got the car in front of us to see for ourselves first hand, so people pitch in with suggestions based on the information set before them.
I should imagine that the OP has long fixed this car (if not why not

) but won't conclude his findings in the thread as he's getting free entertainment from you bleating on about his oil and water.

We have no previous info regarding this car, did it overheat, did it throw a belt, has it been timed incorrectly? We are not privvy to any of this info so it looks like a strip down is required to sort it (OP, pull your finger out

), and more to the point, is there any bloody oil in the water?

no signs of oil in expansion vessel.
headgasket failure = leak in the gasket which lies between the combustion cylinder and the water cooling. hence over heating, hence water sucked into and/or leaking into the combustion cylinder = water leaks past rings into crankcase and/or steam is blown past rings into crankcase where there is .....OIL.
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Ok have checked dipstick only oil on this.
Water getting into the oil is not specific or otherwise to the omega - most cars have cylinders, pistons, piston rings and oil in the sump. mayo doesn't mean the hg is blown it could just be condensation into the oil but it is one symptom of a hg failure
this isn't rocket science it is commonly known. hg failures are rare on omega Vs so maybe members have never come across it but just use google, eg:
"What are the symptoms of a Blown Head Gasket? As coolant is pulled into the combustion chamber it will cause your engine coolant level to drop. This can cause a low coolant light and overheating if the cooling system on your vehicle is not continually topped off. Also, once your engine is turned off the coolant still left in the engine cylinder will seep past your piston rings into your engine oil. Coolant mixed with oil will make a white milky substance. You may see this on your engine oil dip stick or on a ring around your oil cap."
http://gobdp.com/blog/what-are-the-symptoms-of-a-blown-head-gasket/ (or many other links just look for yourselves)