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The 3.8 is actually an M97, not an M96. LN could certainly sleeve it if you wanted Nickies, run JE pistons, R&R or Pauter rods, LN upgraded IMS assembly, oil system mods, etc.
I don't know for sure, but there MAY be room to punch out the bore a hair more than the 99mm it already is.
My motor started life as a 3.6 (96mm bore with 82.8mm crank) and was sleeved with Nickies out to 99mm (so the 3.6 became a 3.8), and uses the 997 3.8 head gasket.
Not sure if the M97 really is any better or if it's just a function of the small sample size, but you don't seem to hear about 3.8s blowing up....
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Boxster S
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