This sounds much more involved that just a cam replacement. Are you going to replace the piston rings, rod bearings, camshaft, etc? If you want this motor to live a long time, I would suggest removing the engine from the car for a complete rebuild.
A in-frame rebuild will not last nearly as long as a complete overhaul. Why, you ask? Because you can't replace the cam bearings, main bearings, freeze plugs, or bore the cylinders with the engine in the car.
You say that the cylinders have a significant ridge to them. This indicates that the cylinders have severe taper (wear). You need to know exactly how much taper your cylinders have. If the cylinder taper is about .010" or more, new piston rings can break due to flexing.
I did a ring job on a 235 back in '91. It had 68K original miles, moderate cyl taper and worn pistons. The engine ran another 30K miles before it failed in '96. The new rings cut the original #6 piston in half at the oil ring, due to wear in cyl and piston ring lands. Years later I heard that piston separation was a known problem when using new rings in a worn straight 6. So you must also check your ring side-clearance in the pistons, to prevent piston failure.
You also said you might have some piston to valve contact in two cylinders. That may be due to carbon buildup on valves & pistons, or a bad valvetrain part. You'll need to have the valves checked for damage, and the pistons & rods checked too.
How was your oil pressure when the motor was idling hot? 25 PSI or less at idle is an idication of worn cam or main bearings. Even if you replace the rod bearings and oil pump, your pressure could still be low due to the worn cam and mains.
You'll also need to check your rod journals for out-of-round and wear if you're replacing the rod bearings.
I don't want to scare you. I just don't want you to spend money and time, and the engine fail early. An in-frame rebuild requires almost as much money, time and effort as a full rebuild. If you go through that much trouble anyway, do the job completely.
Whatever you decide to do, we're here to help!
Chip
