Mike,
Like you and the others said. Fix the sleeve and the the piston. Run it.
Can you even find new bearings for this engine? Or is it babbit? You might have to pay an arm and a leg for a new cam in good shape. Cam is critical, but I suspect this one works adequate.
Old tractor restorers... pull some rusty thing out of a field that's had an open exhaust for 50 years. Engine rusted shut. They'll spend 2 years getting that engine busted free (slowly just a little movement twice a week). Once free, hone the cylinders and valves a little then put it back together. Yah it's got next to no compression but it'll run. Sand blast the whole thing, put nice paint on it, and sell it for 10,000 to some shmuck that don't know better.
