I got the head off of motor. The number 3 piston is very clean likes it brand new.The number 6 valves r white in color. Rest is carbon up.Couple looks like they been leaking some.lm stuck an just don't where or what to do from here.

Can anybody give me any info about this problem.

The number three injector is leaking. Take the injectors to the diesel shop and have them checked or get some new ones. Rotate the engine and check all the cylinder walls for vertical wear lines especially #3. All these issues are fueling related In my opinion except the valve I would pull that exhaust valve take come blue dyekum and check it for a good seat contact,face,margin,overlap to see how and where on the valve face it's sealing,and then lap it to the seat with some VL compound. it may also be that it was a leaking exhaust valve from a bad rocker arm clearance, bad valve guide, warped valve.

OK I went an check the cylinder walls. They do have markings in them. Some of the walls I can catch my finger nail om it. I haven't check the valves yet. So what do u think I should do next with this motor.

Time for a trip to the machine shop for a dip in the hot tank, bore the cylinders oversize pistons,rings etc. It will be cheaper to get another long block that has been overhauled and if in a pinch for time it's the way to go.
As I saw in a movie one time the guy said, " hold on to your lugnuts it's time for an overhaul".

Well thanks for info. Not what I really wanted to hear. But that's what I figure when I felt the groove. I've built a lot of Chevy motors but diesel b my first. I guess there is a first for everthing.

grandson diesel
 

Just to be sure you are talking about vertical grooves and not the ring groove around the top of the cylinder?

Ya the grooves goes up an down the cylinder walls. If I was thinking about selling this truck what u think it b worth the way it is. It's 98 12 valve ext cab 4dr with a lot of new parts.trans is only about 8 months old. Has all the billet heavy duty parts for towing. All new brakes,rotors,calipers,hud bearings,drag link bar.it is the long bed. 354 gears.body is almost rust free.

Check with this guy he was just looking for a better body for his 97 project today. Is yours a Quad cab? sounds like your truck has been just about overhauled except for the engine.
https://www.dieselbombers.com/12-val...-cab-swap.html

There are some pretty cheap engine overhaul kits available I think they start around 600 and up with pistons,rings, bearings etc. then the machine shop will charge a fee for each hole they bore and hone as you know.