Well I got the last piston out of the donor motor and pulled and inspected the cam and lifters. The lifters were all in mint shape except a couple with small wear lines on the rollers. The camshaft is pretty rusty in some sections, I'm not sure what to do about that. The crankshaft is in great shape though. I washed out the block with a garden hose although it was already clean. I'll be taking it by a machine shop soon to have them measure the cylinders so I can know what size piston kit to get. I imagine I should take the cylinder heads in as well and have them checked.

The stock heads really weren't the best even when new. The deck castings were rather thin, and prone to cracking around the valve seats, etc..... You can get decent replacements for around a grand a pair though.....

My understanding is that the siamese exhaust valve cracks are fine as the leak dead heads into no where so it's not an issue? Should I really spring for new heads?

You can have yours checked, and if they aren't bad, continue to use them..... Just depends on what you want. If you are "tweaking" the engine for a bit more power, some of the aftermarket heads flow MUCH better.... You can even get them with larger valves.

Have it blasted with soft media like walnut shells, baking soda or plastic media. It will remove the rust and not remove any of the metal on the cam.

If it's pitted though, even tiny ones, that will dramatically accelerate wear on the rollers..... If there is ANY question at all, I would replace the cam.

Okay so just to update everyone, the rusty block was just too nasty to save, I didn't want to spent any more on it and possibly have runaway machine shop costs. I decided instead to go with a remanned short block motor on ebay sold by Mabbco Engines and VEGE remanned cylinder heads from summit racing. The Mabbco Short block cost $1700 and the VEGE heads cost $600 total plus a core charge for each which I'll make sure to collect on. I'll clean up the lifters and pushrods and rocker arms from the old motor and use them and double check all the bolts I can in the Mabbco because their reputation seems a bit suspect on that front. Let me know what you guys think. Hopefully this mabbco isn't a hunk of junk.

For the money you are spending, buy new lifters..... Pushrods and rockers can just be thoroughly cleaned, but, I would not trust used lifters in what is essentially a new engine.

I'd spring for new lifters. This engine might have roller lifters but lifters can take a set and wear into the camshaft. Used ones will work, but have a shortened service life. Considering the labor involved to replace one that's bad, it's cheaper in the long run to buy new.

Yeah that seems like good advice. I'll probably go with the Sealed Power HT2269 - Sealed Power Hydraulic Roller Lifters from summit even though they are $239.00 they seem better than the melling lifters. Then I need to soak them in oil before installing right? And install with the oil ports facing up?
Sealed Power HT2269 - Sealed Power Hydraulic Roller Lifters
Sealed Power HT2269 - Sealed Power Hydraulic Roller Lifters