It's probably salvageable, but stand by to give your checkbook some CPR. I see at least two cylinders that will probably need sleeves. Also, have a good machine shop do a thorough cleanup and Magnaflux job on the cylinder head. I'll suggest again, since the cylinders will need a big rebore, this would be a good time to scrap the cast iron 216 pistons, bore the cylinders 60 over, and use standard bore 235 aluminum pistons. That can be done even if you still need a sleeve or two. Use a 3/32" wall sleeve instead of a 1/8" to minimize the amount you have to bore out of the original block.
Jerry
