340 Block Bored to 4.160????? Help

I think I would first pressure test it to see if the boring has resulted in some hairline cracks or tiny pores into the water jacket from the bores. Coolant leaks could be causing the pitting' the pitting pattern in the pix is sloped, almost as if there was liquid in that bore.

I dunno see why the bore is an issue per se, unless the walls are paper thin and flexing. It do seem like a ton! OP, what do mean by the "rings are cooked"? Are they broken?

What pistons and cam are you running?