Thanks for the replies. The other cylinders were all within the acceptable range, and there's definitely no rod knock. The engine sounds great, starts right up, and pulls strongly, especially on the top end. It's just had this lopey idle that won't clear up with a tune up and is a little sluggish and misses a bit when accelerating from a dead start. It also has high HC readings at idle, which is why it wouldn't pass emissions. HC readings at 2,500 RPMs are good.

I'll pull the pan to examine the bearings. There's a good machine shop close by that says they will rebuild the heads for about $500. The mechanic thinks it's a burnt valve, but we didn't discuss shimming as a possibility. I also wasn't aware of the knock sensor issue. Thanks for the heads up on that.