If your prior head gasket was blown I would have the head skimmed and hand-lap the block. If your prior was not blown I would check it with a straight edge and clean it with brake cleaner and/or gasket remover, scraping with a razor blade.
Appears to be NA so I would say (when it comes to power) a 2hp restriction from those tips is the least of your worries. It looks like a clean install. I would have chosen a different tip style though.
Not sure what mine will be as I HAVEN'T GOTTEN MY W2 YET!!!! I AM PISSED CAUSE I AM TYPING IN ALL CAPS WHICH MEANS I AM YELLING IN INTARWEB SPEAK.
EDIT: Mine will probably go toward ceramic coating and turbo rebuild.
As I thought about this a little more. I would purchase some coilovers and sway bars just to make it a little more fun in the twistys. Straight line performance is somewhat futile unless you are willing to drop some major dollars.
When IJ was building his first engine he measure the capacity of the stock oil pan and it can hold 10 quarts without touching the crank. I run 6 just to be sure.
And what Jimi said, try a heavier weight oil.
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