Good advice all around - I wish I had seen that awesome rebuild thread before I started, but thankfully see it now before I start any of my own work on the engine. Since my machine work has already been done, is there anything special I need to do to protect the block if I'm pressure washing the water jackets? Spray the bores and bearing races down with WD-40 first, then brake cleaner to clean it off before assembly lubricant?
As for the head bolts - the threads themselves look fine to me. It seems like it's corrosion below the threads at the bottom of the blind hole.