What was found
(CAN) #2 ENGINE REMOVED DUE TO NO TGT MARGIN. ENGINE HAS RUN WITH NARROW MARGIN SINCE LAST INSTALLATION 775 HOURS PRIOR. SHROUD HAD BURNS, CRACKS AND IRREGULAR HOLE APPROXIMATELY 5" LONG TRAVELING CIRCUMFERENTIALLY AT MID-SPAN DUE TO CONTA CT WITH IMPELLER. IMPELLER EXHIBITS SIGNIFICANT EXDUCER WALL DAMAGE RENDERING IT SCRAP. AXIAL AND SIDE PLAY WERE WITHIN LIMITS AT BOTH BUILD UP AND TEAR DOWN. RUB CONDITION SUGGESTS PROFILE OF COMPOUND CURVE OF SHROUD WAS ALTERED AT LAST REPAIR. AS A PRECAUTION, THE DIFFUSER ASSEMBLY WITH #2 BEARING INTACT, 2ND BEARING INTACT, 2ND NOZZLE, COMPRESSOR ROTOR AND HALVES SENT TO MANUFACTURER.