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Sounds like the engine has some piston wear that is causing the cold slapping noise. The "sucking a sheet of paper into the exhaust" is an indication that at least one exhaust valve has failed.
You have two options:
1: Have the cylinder head repaired or replaced and live with the piston slap. The slap is an indicator that the bottom end of the engine only has 100K to 200K miles of life left. Personally, I like ten year warnings of impending doom.
2: Find a local bone yard for a donor engine, some of them will even do the swap for you, often under $500 for the whole job.
If the above two solutions are not acceptable to you, let me know, I'll build you a factory spec engine for $2K and install it for $200... note, it might take me three months for me to do so and you'll have to drive the car to NC so I can install it.
My personal advice is to pull the cylinder head yourself, take it to a machine shop and find out if they can fix it for a reasonable price. If not, go the bone yard route and get a good "new" used engine. Make sure you hear it running first!
jorrell
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92 245 278K miles, IPD'd to the hilt, 06 XC70, 00 Eclipse custom Turbo setup...currently taking names and kicking reputations!
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