Just a suggestion...I'd run a compression test first.....get a baseline reading and then add a little oil to each cylinder. A boost in compression will indicate ring wear....adding a fresh valve job will just create additional blowby.
As I see it you have three options.....leave it as it is....rebuild....or replace the engine with a decent running used engine.
A professional rebuild is going to run 2K and you know that you'll add additional bucks for upgrades.....finding a good used engine that has been replaced by a small block shouldn't be that tough in So. Cal. Or you can just drive it as it is....if it starts and runs and you just use it on the weekends it may be tough to justify the expense. Your call!
Dave
