Worn out cam? Springs? Push rods? Rockers? Timing chain - er 2.4 so belt.
This is the gravel driveway mechanic in me asking questions...
When was the timing belt changed? Tensioner?
-Mac
Also wondering if when it's at TDC and the valve is leaking if you can physically grab it and wiggle it up and down.
-Mac
Rings and a quick hone?
-Mac
Anything stamped on the pistons to indicate they're 10 thou over?
-Mac
So you're 6 to 7 thou over spec, you have 2 thou larger pistons? I don't see the mm on there...so I'm assuming 5 thou over which liberally would get you in spec.
You could throw new rings on. You could just try number 4. You could do a quick hone and replace the pistons. You're there anyways so at least rod bearings.
Or find a machine shop to bore it out, order a $2000 stroker kit and send it. Maybe you'll have better luck with machine shops in your area.
Or maybe it's time to shop around for something used or a short or long block.
Clearly seems like you've got the time and enough know how to make some good decisions. I don't know what's in your budget... time or money wise.
Wish I was closer to upstate NY and could help.
-Mac
I keep thinking you've got a 4.0. Just stuck in my brain.
No idea if you can stroke a 2.4...technically if you're 5 over that's approaching the limits...I think. I don't have much expertise with the 2.4.
Good news you'd only need 4 pistons and bearings!
-Mac
When I totalled my TJ last summer the replacement frame was a 2.4. I cut off the 2.4 brackets and my 4.0 brackets on my bent frame and welded them on.
If you've ever looked at the welds on our frames a kid could do better.
Metal is thin enough...you can also preheat with a propane or butane torch for more penetration.
I bought my frame and tub for $1300 in Oregon. I'll bet you could get a hot shot trucker to deliver something to you for $1000 or less.
-Mac