Ok guys. This is the issue we have found. The engine case is roughly .160 to big for the cylinder sleeve. So there is a gap between cylinder sleeve and engine case.
The issue is the pistons on the M8 rock at BDC,( Bottom Dead Center ), in this sleeve outside of main cylinder.
When doing a 114″-118″ ( base 107″ ) the cylinder sleeve is thinner, but still well within safe , where it goes in the case.