Interference engine?

[Doug Tatham]

I've just installed a new (rebuilt) small block because of damage to a piston, the crankshaft, and engine block that resulted from my sister driving a couple miles with no oil. The engine runs fine, but it does burn a little oil. I've used about half a quart in the first 500 miles. Is this usual when breaking in an engine or does it sound like something may be loose. I haven't seen any signs of oil leakage. I did have a problem with my torque down of the cylinder head. I used foot lbs instead of neuton meters and snapped the ninth bolt on the second tightening step. I replaced the broken bolt only hoping that the rest weren't already stretched. I'll be ordering and replacing all the bolts soon. I'm getting a bit of steam in my exhaust, so I know the head isn't tight enough. Could this be causing the oil loss as well?
FYI
Awhile back I posted that the engine in a 91 Jetta 1.8 is an interference engine. This was based on what a mechanic at the dealership told me. I had my cylinder head off last week and put it on a flat bench and rotated the cam. There was barely contact and if a gasket was under it there was no contact at all. At the same time I found out that you can have compression in spec with a bad piston so long as at least one compression ring is good.