burning oil??

[bluuuurr]

get a leakdown then compression test done at a reputable shop.. this will tell you what's wrong

i'm guessing bad piston rings

get the tests done asap and then try to discuss it with the company you bought the motor from

[GSRteg®]

Yes, it need a new seal on top of the spark plu cover were the wire goes inn. Thats it this is do to high reving engine that the seal breaks. Same thing happend to me thats why I i asked. Since no oil being lost in the engine anywere you know.

[GSRteg®]

This might be the problem since you said that when you pulled out spark plug #3 it had oil then this def is your problem. Also when you swaped it did you start to rev it high rpm? If so this happens when this is done.