340 engine repair/build questions

current game plan is to remove the remaining head off, soak the cylinders down with some PB or WD and turn the engine by hand to see what it looks like in all of the areas on each cylinder.. it’s sitting in my friends shop and he said he spent a tiny bit of time cleaning the one pictured above and it started it come out.. so may not be as serious as it looks. I’d like to save it. Labor and shop rates vary quite a bit.. seller is willing to offer some money back on the engine due to the unforeseen issues.. I wanna be fair, but I wouldn’t be totally sure how much would cover the repair or repairs needed to bring it back to 100%.