Experienced motor interchangers,

Background & Symptoms:
I have an '89 turbo 740 wagon in nice shape except for oil loss (a quart every 125 miles or so). I got the car really cheap because of a blown headgasket from overheating. I only had to put about $145 into a gasket set, timing belt (might as well replace it while you have it open), and machine shop work (head planed)to get it back on the road. The valves were in great shape. The car idles well and runs well. The plugs show that it is not being fouled by excessive oil in the combustion chamber. Although there is some leaking below, from the looks of the top of valve cover gasket oil is being forced out the oil filler cap and spattering the top of the value cover gasket. There is also some oil spattered around the turbo. I don't think there is a flame trap to plug that could account for this like there is on the nonturbos (is that true?) So I am using lots of oil in a car doesn't smoke and the plugs show a nice clean combustion.

I have owned several Volvos but have never had this kind of consumption (just the usual high-mileage Volvo oil spots that mark your usual parking space). Part of the problem for me is that some of these symptoms seem contradictory (i.e. possible ring failure without smoking? ring vailure without fouled plugs?)so I'm having some difficulty in figuring out the problem and my options (maybe smoking and fouled plugs are associated with head problems like worn valve guides rather than bad rings?).

Questions About Options:
1. I have heard that overheating can cause ring failure which can lead to blowby that forces oil out the filler cap and increases leaking at seals. Is blowby caused by ring failure? Have any of you had success with this kind of problem by re-ringing?
2. I have an '84 B230 nonturbo engine that I just took out of another car that I sent to the crusher. This engine is in great shape. I would actually prefer to use it over the uncertainities of a re-ring job. I don't need the turbo and would be glad to have the cleanness (no leaks or blowby) of this engine known to be good. I had in mind using the wiring harness (with modifications) from the turbo that is in the car. Will an '84 engine mate up to an '89 transmission in a turbo car? Are there any conversion surprises/headaches that I should be aware of?
3. Or how about a variation of #2 -- put in the block from the '84 B230 nonturbo in the '89 car and use the head and wiring harness from the
'89 turbo? I would dispense with the turbo and run it as a nonturbo (basic question -- can a turbo head be used on a nontubo block to run the engine as a nonturbo B230 ?).

I look forward to your suggestions.

Mike