Yes, it sounds like worn piston rings. But perhaps the oil problem is only caused by a bad valve seal on #4. In any case you can test to find the cause before you begin.

1. Perform dry compression test
2. Perform wet compression test
If the wet test is normal but dry test is low, it needs new rings. If the compression test is good, maybe only the head needs refurb (new valve guides and seals, which are usually bad in a high-mileage A12).
Details: Compression Test

The steps for engine rebuild are in the Datsun factory service manual. Or other brand (Gregory's, Chilton, etc). They are quite detailed.

You can do some very rough checks to find the condition. If you remove the oil cap, and with the motor running, when you rev it, it belches smoke out the rocker cover - that is blowby, and that is coming from the rings.

If you have it on the freeway/highway, and floor it, and it smokes out the exhaust, another sign for rings (and possibly piston damage if oil burning has lead to detonation).

If it smokes out the exhaust at idle, and then blows a puff of smoke that clears up as you accelerate, that is in fact the valve guides that are stuffed. Basically at idle there is high vac in the intake ports, so oil can get sucked from the rocker cover into the valve/guide and through and into the intake ports. as you accelerate, there is less vac in the inlet manifold/intake port, so it sucks less oil through there, and the smoking tapers of a little (unless it's overtaken by that caused by blowby/ring seal degradation).

Another check you can do is a compression test, It'll likely be low, but if you then squirt some oil in the spart plug holes, crank if over a few times, and retest, and the readings all come up, it shows that the ring seal is stuffed, and the oil acts as an extra sealing media, and ups the reading. if the compression test doesn't come up at all from the oil addition, then it's leaking out the valves, which mean the valve/seats will need to be re-ground, or if the wear is bad enough, replaced and re-cut.

You can also look at valve/seat wear by pulling off the rocker cover and checking the tappets. AS the valve/seat areas wear the valves will sit a fraction higher in the head, so the tappet/rocker clearance will have closed up a fair bit. It might have even 'burnt out' a valve - which is where the valve doesn't close fully (exhaust almost always, hardly ever intake) due to wear, or tappet clearance (from all of the above) and then it can't cool down, and transmit heat through the valve seat to the head, and so it burns up/gets eaten away.

These motors are tough, and you can sometimes get away with the std crank and rods and new bearings in std size, but if the wear is too great, or big scores/scratches, you'll need to get the crank machined down to the next undersize and run new bearings of the matching undersize.

Imho, whenever you rebuild an engine, if available, replace the oil pump with a new one (if they are good, some rare engines the factory pump is far better than aftermarket replacements) and the same for the water pump - cheap insurance. likewise fit a new thermostat, and most important - at the very least get the radiator end tanks removed and the core cleaned out. If money allows a new radiator is likewise cheap insurance.

I'd absolutely check on condition, but things like timing chain should probably be replaced but in rare occasions can be reused.

Thanks, I will have to open it up & check what needs to be done... hopefully with datster's help we'll sort it properly!

You have to open up and check the damage first. But a short list of the major things would be. Piston and ring set main and big end bearings complete gasket set redo the head new oil pump and water pump while you at it have the crank and bore checked and so on.

Oh shucks.... anyway, i dont think the engine has ever been opened!

I tried checking the wiki for a complete list of what i would need to do/get if i am to re build my engine.

can any1 tell me?

Sounds like rings and pistons to if it breathes like that. Then is bearings to so it a complete motor redo would be the way to go. Good luck

My 1200 is finally parked now, so it will give me a chance to work on it.

Engine is leaking oil out of the tappet cover breather, tappet cover & head gaskets, no.4 plug gets gummed up with oil & wont fire within 10km of driving, smoke out of the tappet cover breather is so much so that when connected to the carb it kills all power of the engine & i have to adjust the carb just so that it can idle. But not THAT much smoke out of the exhaust.

Carb needs to be replaced, that i know, but what am i dealing with when it comes to the engine? head replacment? gaskets & stem seals - decoke? valve adjust/valve guide replacement?