340 Engine Shake

No,.the point of the tear down was to replace lifters, then the mechanic said he didn't like what he saw on the cam lobe wear. Then he found glitter in the oil (see bearing pics) and also in the filter.

So I decided to tear it down to find the source of the metal (still undetermined) and found the water situation. So one problem just snowballed into another.

I'm dropping it to the machine shop tomorrow to have it sonic checked and magna fluxed. When I was cleaning the oil off for transportation, I saw rust flakes coming out of the water jackets, when I rotated the engine on the stand. But we'll see what the machine shop says.
I don't see anything nasty except for those bores. Did you say you were already .060 over?