Cylinder bore is scratched up!
Damn! That looks deep…
Something to consider: Despite how bad it looks now, you may be able to bore it and save the block. But you won’t know until you pull it and check.
However, running it this way could almost certainly cause even more damage, and probably to the entire engine, should some of that **** get in the bearings and/or oil galleries.
I hear you on the money thing, but it’s gonna be a HELLUVA lot more expensive to fix it if you run it as it is, in my opinion.