This could be any one of many things- the clue, however, is in the fact that you bought it from an auction with very little oil. Think about it, for an 02 car last serviced in Dec 06 to appear in an auction in March 07, it would have to be there for one of only a few reasons- either it's an ex fleet/lease car (a bit old for that), a finance snatchback (unlikely to have been serviced, however..), or it's totally knackered following some catastrophic overheat or oil leak and the owner wanted rid asap! Do you know who had it before it went to auction? That can tell you a lot.
A bit more info is needed really- how does it drive: does it get hot? Does it smoke-under load or off load or all the time? Does it use much oil in normal use?