Actually, I've seen engines in a lot worse shape than that get rebuilt successfully. There doesn't appear to be any rust-through of the sheet metal parts like the oil pan or side cover, so that one could clean up and be a candidate for a rebuild. The 235 is still a better choice unless you're planning a completely original restoration. If you want to deliver it to south central Tennessee, I won't charge you anything to take that 216 off your hands! LOL!
Jerry

"It is better to be silent and be thought a fool than to speak and eliminate all doubt!" - Abraham Lincoln
Cringe and wail in fear, Eloi- - - - -we Morlocks are on the hunt!
There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self. - Ernest Hemingway
Love your enemies and drive 'em nuts!