I always assume the engine is shot, but rebuildable, I prefer untouched engines anyway. I have fixed, if possible, too many "rebuilt" engines. 273's were pretty much bulletproof unless run without oil or coolant, unlike newer engines where cracked heads are more than common. I have never had any valves sink, but I usually replace the exhaust valves with stainless steel ones as my common practice. Usually 273's are cheap to rebuild except for pistons, but good pistons for a 318 are not cheap either. I am not sure I would pay $1,000 for a parts car, but a V8 in an early A is a pretty sweet deal to get all the early A V8 special parts. The 904 is probably fine, you can tell by the fluid. You can also drain the torque convertor and adjust the bands in the older transmissions and have them last virtually forever.
