Pull all the freeze plugs and poke as much of the crud out of the block as you can with a piece of stiff steel rod, soak it with a mild muriatic acid solution to loosen the crud in the water jacket, then pressure-wash everywhere you can reach. Having the head off is a huge advantage- - - -it gives you access to cooling passages you wouldn't be able to reach otherwise.
Once it's clean you can make a more informed decision about whether to try to salvage this block or look for one in better condition. Also check the bore size and cylinder taper- - - -if it's going to need a rebore job, start looking for a replacement block.
Jerry
