Thanks for the help guys.
I bought the engine off ebay for close to $140. The crank pin reads 4.15mm at the worst area and 4.20mm at the best area with my digital calipers. The conrod is 4.28-4.32mm so there is probably .15mm of play. This guy was running 2 .3mm shims and 1 .1mm shim for a total of .7mm head clearance. That is definately wrong.
Thanks for you help though guys. I guess I will need to replace a crankshaft, rod, and piston/sleeve. I could probably buy a new ns12s3 for that price since they are only like $220-230 new. No more used engines for me. I am gonna request a refund from the seller cuz this engine is complete junk, it looks good cosmetically but the guy had no clue as to what he was doing.