"There is minor pitting on the block right around the edge of a couple cylinders. I've read that a good gasket sealant can compensate for that--what do you think?"
James, I'm no professional mechanic, just a very interested and motivated amateur. But from what I've seen, combustion pressure and coolant will find any flaws in casting surfaces and blow through them, making matters worse by eroding the casting surfaces and the gasket too. Failure of that type is particularly eminent when the flaw is between two closely spaced cylinder bores. One person's "minor" is another person's "oh expletive deleted". I would suggest checking the questionable block deck with a precision straightedge to verify flatness and having a really experienced mechanic look at the block surface. If there is any question about a marginal condition I personally would correct it now that you have already done so much disassembly.
"Stupid question here, but how do I check the bearings, and what am I looking for in them and the crankshaft?"
I don't think there is such a thing as a "stupid" question. How are any of us to learn if we don't ask? You check the bearings by removing the connecting rod and main bearing "caps". That will expose the crankshaft and bearings themselves. In a previous post you said "When I pulled the valve cover the rocker arm was pretty much inundated with gunk.". That same "gunk" could be in the oil galleries, on the crankshaft bearing surfaces, on the bearings and it could also be clogging the oil pump screen. A clogged oil pump screen will starve the engine for oil with near instantaneous disastrous results. The crankshaft and bearings should be smooth and free of abrasion damage. With everything exposed you can check the bearing clearances with "plastigage", a plastic product that looks like mono-filament fishing line and is crushed between the bearing cap and the crankshaft. The smaller the clearance, the flatter it is crushed. The paper container has a scale printed on it that you hold against the flattened plastic to see what the clearance is in thousandths of an inch indicated by the flattened plastic. It's a very simple product to use and really accurate if manufacturer's directions are followed. It works!
I know from restoring my '36 Chevy pickup in the early 1970s, including assembling the engine, that a properly assembled engine in a weekend-driven toy will outlast the guy who assembled it. So if you get it right now you won't have to mess with it ever again. But you probably already heard that from your granddad plenty of times. I think he would really like what you are doing now with his GMC.
Have fun!
