I'm supposing he did a compression test then? FWIW, compression specs are 195-440 but in reality we see anything in the 350-550 range on a healthy motor. What you really are hoping for is all cylinders above 350 and the the lowest reading to be within 25% of the highest. A "weak cylinder" might well mean low compression which could come from rings, a blown headgasket or a valve problem. Black stuff in the oil could be a headgasket blown internally(not extremely common), cavitation pinholes in the block(fairly common on 7.3), or oil cooler o-rings(common on 7.3s). If you have cavitation or a really worn out motor a longblock might be your best option. Other members have used Dealer's Diesel, Promar, and Diesel Auto Services. Good luck,
JD