You should have checked the blinker fluid before you started it up......Now your transmodulator has a broken cog wheel and your sprocket shaft has a bent o ring....
Seriously dude, two words..
FORGED PISTONS!!
Man that really sucks though, thats the bad thing about used motors. You never know what you are getting unless you tear it down and rebuild it. I do understand wanting to save money, though it may be cheaper to go ahead and build it instead of buying another used engine and risking this happening again.
Good luck,
James