What kind of PCV set-up are you running? Do you have a catch can. If its sucking oil in through the PCV the catch can will help. Just make sure it's built with a baffle.
Check your o2 outputs and replace them if needed.
My car was eatting oil and gassing up the oil and my PCV was wacked out. If your running TFS heads make sure there is sealant on the rocker studs as they protrude into the runners on the cylinder heads.
Also I looked through your post, seems like you might want to look into finding a mechanic that knows LSX based cars and a good tuner.
Ask in the regional forums.
I don't like the fact that your mechanics could not tell you why your original motor failed, and now they can't decide between a tuning issue and a mechanical issue and are just pointing fingers.
Last edited by My6speedZ; 04-17-2012 at 12:44 PM.