I need Ideas on what to check.

[Mikanic]

Wow as a tech I hope I never have to witness this. I agree with Rawze, this shop may not be as reputable as you think. They should of had the bores cut the first time, its a no brainer at this millage and with a new head.

I agree liners don't split because of protrusion, unless MAYBE your cut is crooked but you should of measured that and know its not crooked. I know paccar have issues with the block wearing more on 1 side than the other and it makes for a crooked counterbore and the result I seen is a blown headgasket not a cracked liner. But they have very different liners and I never heard of a cummins doing this. #5 cylinder is almost always the issue when they have a blown headgasket.

Bottom line I think you almost certainly have the same issue going on. I would be curious to know why they thought the rod and crank were good, what did they measure to find this out? Did they measure the horizontal diameter of the bores? Either way, you need to ask yourself tomorrow before spending all this time rebuilding this engine, can you still trust the parts in this engine? The block, the head, the rods or crank? Even if some of them are new you are gonna have to pay the shop alot of money just to make sure everything is still good and you are most likely gonna end up with one or the other thats worn out or bent. Can you trust this shop to find out if those parts are still in good shape?

What I'm getting to is that you may be at a point where you need to start fresh with a new used engine. Don't waste time rebuilding this engine. Its not gonna be much labor to swap the engine out and you will be faster back on the road. You are gonna have all the spare housing parts from the engine you currently have. It sucks, you just paid to get your engine rebuilt and now you'll have a used one but I feel like its your safest option. Just my opinion.