every k series i have ever seen has the stat bolted behind the waterpump housing? (in line 4). since 1989 when introduced i have never seen a liner move! . have seen a few bent con rods and pistons, the good thing is you just replace the damaged liner (£25) agreed the engine in it self does put out quite a lot of power and does rev!! hence the kit car boys liking them. god knows how but the design won the queens award to industry in 1991!! but still the head gaskets go......
Agreed, it needed further development to overcome its issues. However, BMW were trying to milk Rover, hence no development money went in (to anything until too late). Obviously, Powertrain had no money to develop after the BMW sell-off, so the lump never got the development it badly needed.
You cant blame BMW for this one...........the K series pre-dates BMW by many years..............it should NEVER have been released as it was but, Rover were desperate.......they were still mainly using the naff A and B series engines!
Yes, Rover design through and through. Probably the only reason it won the design award 
However, it became apparent that it needed extra development, which BMW pulled the plug on.
Er no.....Rover brought it into use to soon....it should never have reached the market in the guise its in.
Its yet another example of why Rover is no more.....no continual development, half cocked attempts at catchup.........all adds up to bye bye Rover.
They are the route cause of thier own demise.
If you are talking about the old school Austen/BL Rover, then yes, you are of course absolutely correct. Release junk thinking everyone would buy whatever.
However if you are talking the later Aerospace era, esp during the tie in with Honda, a very different mentality came in to the company at the management level. Rover were heading in the right direction when partnered by Honda, and became profitable, even cited as a serious competitor to BMW. Development was happening, mainly in partnership with Honda. The BMW buyout meant the Honda partnership halted fairly abruptly, and with no further money to replace the 'lost' development capabilities was the big nail. It would appear BMW had no real interest in Rover, they were interested in knowledge (mass production knowledge and 4x4 technology). Remember, although the figures have never been released, BMW made a decent profit from the Rover saga. The 75 was the only new car released in this time was the 75. The other cars, BMW retained and morphed in to what we now know as the BMW 1 Series. Obviously the Mini became the BMW Mini. Any capital investment went in to the sites that BMW kept after the sell off - Oxford, Swindon, and the engine plant where the K was made. This is from people involved during this period.
In the specific case of the K, I am told no specific problems were found during the testing phase of the engine. The engine is basically sound with the exception of the HG issue. It became apparent by early 90s that the HG was failing. BMW cut K series development pretty much straight away. The only engine with any BMW money was the (good in its day) 2.0l diesel. The K desperately needed some work to overcome its flaw, and the people involved thought it would be fairly simple fix it (but would involve retooling to modify the block).
Even after the sell-off, when BMW owned the K series (before selling back to Phoenix later), no further development was done. The BMW Mini was designed to use this power plant (before changing (Chrysler?) for 'non technical' reasons).