Well, before anybody suggests he jump in & start disasembly, there are still lots of questions to answer - & as he's new to MG's, we need to go slowly on this one.
Some good questions already posed...let's summarize & answer these in order:
1) what type oil is in the engine (20w50, 10w30) & how long's it been in there?
2) what's the oil pressure when first started - idling & at speed?
3) what's the oil pressure when the engine gets to normal operating temperature - idling or at speed? [think that's been answered: 10psi idling or at speed]
4. what's the compression - taken dry & then taken wet?
5. can you do a "leakdown test"?
There may be more, but that's a start.....