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Wow, that is something.
From Pelican...
Cylinder Liner Cracks: In an effort to reduce costs during production, Porsche utilized a type of insert-mold casting process to directly incorporate Lokasil cylinder liners into the case. While this is a neat way to reduce the total number of parts used in the engine, this design basically casts a wearable part into the engine case. There is no factory replacement for the liners: when they wear, the factory expects you to buy a new engine case. In addition, the design of the cylinder liners allows them to "float" within an area filled with coolant.
Excess vibration and twisting from the normal operation of the engine appears to be causing some cracking in these liners, resulting in a small chunk of the liner breaking off. This "D-chunk" problem seems to ironically occur mostly in gently driven cars. Boxsters that are driven hard at the track or on the street do not tend to see this type of damage. At least with respect to the track cars, one theory is that these cars tend to have their oil changed much more often. The problem affects mostly the 2.5 and Carrera 3.4 engines: the 3.2 Boxster S engine appears to be unaffected because it has thicker cylinder walls than the 3.4 engine. When this failure happens, you will see oil and coolant begin to mix together, or a slight unexplained coolant loss.
If your engine experiences this failure, it can be rebuilt using LN Engineering's Nickasil liners installed. They take your old case, machine out the cracked or damaged Lokasil liners and install an aluminum Nickies insert which is stronger and more reliable than the factory cast-in liner. In addition, with the installation of the liners it's fairly easy to increase the bore of the cylinders which translates into increased displacement and more horsepower. If you go this route, you will also need to use some aftermarket pistons and perhaps update the software in your DME to accommodate the change
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