97 4.0 somewhat worn/using coolant looking for general suggestions on repair/replace

Looking for some input with the 4.0 in my 97 XJ 196,000 miles. I bought this heep last summer as a fixer-upper. I've put about 12,000 miles on it since I bought it. Lately, I've noticed my Jeep has started using some coolant. About 1/4" in a couple thousand miles.

* I went around and snugged up the water pump and coolant hose clamps in case anything was leaking. Only place I saw anything questionable was on the exhaust side of the block, below the water pump. I sprayed that down with cleaner and will monitor.

* Oil looks good, under the cap is clean now that its warmer (had a bit of white cream during the winter).

* I also sent an oil sample in for testing. Negative for coolant, but sodium and potassium were 100-110 ppm. I would expect <5-10 ppm. This tells me coolant is getting into the oil.

* With 10w-30, the oil pressure on the highway is not stellar. 43-45 is common and less than 1600RPM it can be in the 30's. Meets all book specs and does not smoke or have any major oil consumption.

* Noticed that the distributor shaft has some play in it. The wear mark on the rotor is a bit larger than I'd think it would be if there no play in the shaft.

* Lifters, rods are quiet; no unusual noises

I am undecided between pulling the head, sending it to the machine shop, and putting it back on with a new head gasket; or replacing the engine altogether. I haven't tried 5w-40/10w-40/15w-40 in it yet to see how it may respond to thicker oil. Any thoughts?

One more data point

* Compression adjusted for altitude 163,162,166,169,173,153

I had something similar (twice), Up high behind the shroud where the cross channels meet the end tank on the radiator. It would only leak when under pressure (operating temperature) and the drip would evaporate before it hit the ground. It eventually left a trail of coolant colored powder stain that I could follow back to the leak.

Two different radiators, in two different XJ's, almost the same spot, passengers side. It's hard to see up there, try a small mirror and good flashlight.

Do you ever smell coolant? A small drip out of a heater core is a possibility.

Sometimes coolant leaking into a cylinder will leave a stain on a plug end. Not noticeable on a carbon covered plug (idle) but can be noticeable on a pale plug after the motor has been run on the interstate.

I've let a motor sit overnight and drained the oil cold and dumped it into a large glass container and let it sit overnight. You can see the moisture/coolant in the bottom of the jug.

The radiator is about 6 months old and I haven't seen any traces of coolant leaking from it, but I haven't removed the shrouds/fans to look everywhere. I know what you are talking about though. I replaced the radiator because I could see tell-tale signs of slow leakage with the shrouds removed. On both my 97 and 01, the leaks were on the drivers side behind the electric fan. I don't smell coolant except from the jug. While there may be a leak at the radiator, the oil report shows sodium and potassium. Potassium is a tell tale marker of coolant because its the only fluid in the vehicle that will have it, even with today's oil additives. The plugs looked consistent. No carbon fouling, etc. They are the "fancy" double platinum Champion 7034 and the gap is too high, .050-.053. I will replace them with Champion 412 and set to .035. That won't help coolant traces in the oil though ;-)