Runs great ? define "real bad" - o' burn a quart in 5 hours ? 10 hours? Does it burn 100% of running time, or slow down on the burning oil after it warms up? MMO will burn off after a while.
Do a compression test - might give you an idea "what" is worse - the rings - valves or whole nine yards. Good thing, it is almost free, and will tell you whats going on inside w/o tearing her down.