318 timing chain.....and why the engine should come out.

If it were mine, i would just change the timing set, front and rear seals, the oil pump, clean the inside of the engine best i can, and replace the valve seals.
I would also replace the core plugs in the engine while it's out, it's cheap insurance and easy to do with the engine out.
If you go farther than this, it will snowball to a complete engine rebuild faster than you think, and if it isn't in your budget right now to do this, then just do the minimum to get the car back on the road.
You were planning to rebuild another engine, put your major money into that.............