An imbedded control system is disclosed for use with an engine having a cylinder liner and a seal. The control system may have at least one sensor configured to generate a signal indicative of a combustion process occurring inside the cylinder liner, and a controller in communication with the sensor. The controller may be configured to determine an amount of heat generated inside the cylinder liner based on the signal and a combustion model of the engine, to determine a heat flux through the engine based on the amount of heat and a heat flux model of the engine, and to determine a temperature at the seal based on the heat flux and a thermal model of the cylinder liner. The controller may also be configured to track a time at the temperature, and to determine a damage count of the seal based on the time at the temperature.