I would suggest that you DON'T waste any more time on this engine via warranty unless you are absolutely sure that the engine is completely inspected and found to be in good mechanical condition before it gets reassembled. Including, for the reason I discuss below, the cylinder with the bent rocker arms themselves.
I would suggest that if the dealer wants to buy it back, let him, but read my conditions below. That would be my first preference if I were in your shoes. Yes, CRD Liberties are very rare in this contry, even back East, in fact, they weren't even available in Maine or Massachusetts . But surely that is not the last CRD on the market.
You said two of the rocker arms and one lifter are bent. From the Service Manual:
Quote:
The rocker arms are made of stamped steel and serviced as an assembly along with the lifter. The rocker arm also has a fracture point. This fracture point is designed to prevent engine failure if the engine is not timed properly or the timing belt breaks suddenly. (Fig. 59).
Rockers and lifters don't usually just "bend," that would make me worry that something in the cylinder may have caused that dreaded piston to valve contact vicariously (like maybe a broken piece of glow plug). I suggest that you don't chance it. At least not with the motor that it currently has.
At this point, you may wish to negotiate with the dealer; the truck is not going to be worth much to him with all that is currently known, though he may well believe he can find another chump. Perhaps you can negotiate a MUCH lower price for the vehicle in "as-is" condition, then either have the engine completely investigated or find a different engine. Bent rockers and lifters on this particular motor are cause for serious concern. That would be my second preference if the redness is too much to give up.
By the way, your contract will likely not have any clause in it that states you are responsible for bringing it back to him assembled and in working order for him to buy back, unless the contract envisioned that he was selling you a piece of junk to begin with. Getting the drive train into working order is the
raison d'être for the warranty the dealership gave (sold) you. The reason for his buying it back is because it either was not in working order to begin with (condition covered by warranty) or it broke during the warranty period (condition covered by warranty) and he is not willing to pay to put it into working order for you. If you agree to let him buy it back, you are doing him a favor and are likely also negotiating to void the previous contract anyway, so you can agree to whatever terms the two of you can agree on. But in this situation, since you are considering allowing him to buy it back, there's no reason you should accept any conditions that are less favorable to you than existed in the original contract. In fact, under the contract he may not even have the option to buy it back rather than of fix it. Check the fine print. If you are unsure, hire a lawyer.