Flash rust is actually a good thing- - -it means the block was cleaned well after boring/honing. I'd suggest giving the cylinders another good scrubdown with HOT water, laundry detergent, and a stiff-bristle scrub brush, then a boiling water rinse. Then give it a light coat of motor oil on a very clean rag to prevent further rusting before you assemble it. There's no such thing as cylinder walls that are too clean.
Jerry
