ORIGINAL: bubbagates
From the Saito Manual
Fuel should be 10 - 15 percent nitro with 20 percent oil, preferably fully synthentic
From the Morgan Fuel web site, CoolPower 10 percent airplane fuel (Not the heli blends) only contain 17 percent oil.
Now if you consider that you only go 1.5 tank fulls then it is unlikely that the oil content caused the problem so I would not be afraid to bet that it was either run lean and overheated pretty bad or over it's short life span it was run on fuel that did not contain enough oil. I also beleive the damage was done loing before you got it.
It also simply could have been a bad sleeve.
Now I have had several Saitos and if the price is not a big problem the CoolPower 30 percent Heli blends are the way too go with any Saito. They are 30 percent nitro and 24 percent fully synthetic oil and it will make these engines purr like the preverbial kitty cat. At one point I ran the same fuel as you are and it did well but I could never get the engine to run consistently well, since I switched to the 30 percent I have never looked back.
Sorry about having to give you the bad news...
I guess we have different manuals and ideas. First you say the fuel should contain 10-15% nitro and 20% oil. Then you comment that since cool power only contains 17% that it is somehow unacceptable. Then you go on to recomment 30% nitro even though the manual clearly recommends 10-15%. You also suggest that only fully synthetic oils are acceptable.
My copy of the manual says does say that 10-15% nitro and 20% oil is the first choice. It does not say the oil needs to be fully synthetic. In fact it states that "a mix of synthetic-castor oil is acceptable". It does say that only castor is not recommended. It further states that Hangar 9 Aero-Blend, Omega, Cool Power, K&B, Power Master, etc are acceptable. Given this information, I'm having trouble determining why one would need to run 30% nitro, 24% synthetic oil fuel. My Saitos have always worked quite nicely running standard airplane fuel, 10 or 15% usually Omega or Cool Power.