gasket was possibly leaking, hard to see but looks like it could have been at several spots. That would explain the bubbles in coolant.
never use starting fluid. Ever. If it won't start on it's own something is wrong. Fix that before destroying it.
now with the head off you want to put each piston at TDC and measure how far out of the cylinder it is....and that measurement is in thousandths of an inch so you can't just eyeball it. Measure and record BOTH cylinders. The manual specifies how far out they should be and any deviation means you have bent a rod. most likely. My dad ether'd his G1800 one time, just a little tiny bit to get it to start when it was like 10 degrees outside. Got it cranked up, ran fine-for years. Then one day it started to smoke a little bit. Well it was close to winter service time so I went & got it and did a compression test. #1 and #3 were 490 psi. #2 was 270 I think. Pulled head, measured each (rods were fine) so I pulled the engine out and found #2 cylinder has broken ring lands-and that is due to starting fluid. It was damaged a long time ago but ran for a couple seasons before it's ugly head reared itself. new piston and it's good to go. Point is, the damage is probably done (if there is any) and you may never know it until that one day when it just won't start or starts smoking with excessive blowby.
the one picture, it looks like one cylinder is fairly clean and the other is black, oily mess. The black one would tell me that it's not running properly on that cylinder. Maybe it's my blind eyes, maybe the other cylinder had already been cleaned. Or both.
on glow plugs. You need to check the voltage and you need to also check the ohms of each plug. A test light can light up with 5 or 6 volts but that's not near enough to get them hot, assuming they both work. Even if it is a new engine. New doesn't always mean it's good.
