Got the engine tore down to the bare block today.
Overall condition ain't too bad.
The main bearings were in good shape showing normal wear.
The mains are std size and had 2 shims per side.
Like Jerry surmised bearing #3 thrust surface was wearing out around the crank.

The crank's main journals looked pretty good. All journals passed the finger nail test. There is some wear but no deep ridges or deep cuts. The dark line on the main's lines up with the valley cut in the bearings.

The Cam's bearing surfaces looked good. The lobes are showing wear.

All the rod bearings were wore down to the copper. Some more so than others. They were also stamped as Std so it's possible they are the original factory bearings. There were no shims on the rod caps.

The lifters show alittle wear on their sides. The bottom surfaces did show more wear but weren't pitted. There's holes drilled through them which I guess is to allow for good oiling in the lifter bores.

The infamous #1 piston . The others were in much better shape but worn. The rods all looked good and I plan on reusing them.

Another good sign was when I removed the rear block petcock alittle leftover coolant ran out.

The block, head and crank will be going to the machine shop and all the parts I'm reusing will be getting cleaned up and painted Blue Flame blue....

Dave