a good mach shop can put it in an oven and "bake" the block really good removes rust, paint,and all the other grime on it then you will see the damage if any the rust has done. if it is light bore and line hone may clear it up
iam also building a 4.1 and you can get crank rods and pistons for around $ 1,600 thats new cat crank, k1 rods, and wesico pistions. I think its like 272 c.i. it dosen's require as much grinding of the block. Due to marriage trouble havent made any progress on new engine in a while but soon...