my 340..3 cars, 34 years, 1 family. where to go from here

If the head has all of that corrosion on one cylinder, why none on any of the others? Seems to me that maybe .060 is too far for that block. (Not used to seeing an LA block taken more than .040 over.) Suggest a Magnaflux of the cylinder in question. Otherwise, all the cams in the world won't make better power. 2¢