you don't need hardened seats, That engine has problems, there is a lot of rust on the cam, the oil hole in the crank is blocked with rust or something, that amount of rust in the combustion chamber (#'s 5&6) is not really a good sign, and would indicate something is most likely wrong. If you are going to rebuild it, you will take it to the machine shop for the work, where the very first thing they will do is remove the cam bearings, and all the little metal plugs, hot tank it (which wold ruin the cam bearings anyway), then check it for cracks and such. General accepted practice for cleaning engines before assembly is the aforementioned hot tanking, and a good scrubbing with the hottest water you can get out of your water heater and a good detergent and use brushes of various sizes to clean out all the passages, whereupon you use air to blow out all the passages and pretty much immediately apply some sort of oil to the machined surfaces to prevent rusting, I mean immediately, if you have it right, you will notice the shiny machined surface of whatever you have cleaned first beginning to fade from the flash rusting before you get the end of what it is you are cleaning last. Personally I like to fog the heck out of the passages with WD-40, the majority of it evaporates rather quickly, and it leaves a film that protects quite well. (I used to spray the electrical contact points of things that sat out on deck when I was a merchant mariner with WD-40, it worked very well to prevent corrosion in the salt air, I figure it would work fine for this. Not to mention this is pretty much the sort of thing it was developed for in the first place.) I do use brake clean/brushes to further clean the parts immediately prior to assembly and blow those off with air as well. I am very, very adamant about CLEAN when assembling machinery. This includes threaded holes, fasteners etc. You should probably stay attached to this website like a barnacle during your rebuild because unless you luck out and get a shop with some older fella doing the work, you will need to be able to tell them exactly what you want, not depend on them to know. Because despite the fact these engines are just another machine, they seem to deeply confuse many shops.
