Rust is OK in cylinder walls. ONLY if you plan to bore. Best way to find a really good core is to take a peek at the odometer. If says like 130,000 + good chance you'll find a solid casting. Many drag racers prefer "seasoned blocks". If you really want to know what you got, just have the core x-rayed. There are lots of ways like magnafluxing to check heads and blocks. Like Dino said about the dowel pins and no sheared bolts. Almost anything can be repaired properly by a good machinest--but it takes time away from building.

Shit is all apart. Typical...