since your in the situation your in....and I've been there with two in college, then why not do what your talking about and fire the engine up on a stand and run it before putting it in a vehicle. If the noise was truly the rocker nut backed off that is good news....and its common for re-man engines to have the numbers ground off. (my V8 is the same way) and for it to be .040 over on the pistons someone had been doing something.
Now, I agree with what the fellows have said...but, like most of us, I've seen a lots worse in my day. In the end pictures can be deceiving. The way you want to do it you only have a few dollars into it to get the real answer. Time is on your side, go for it.
...sometimes you can find the re-man tag on the engine. Usually down around the left side. If you have one it may identify the builder or date. If you know the re-man company you can call them with the number on the tag and they can tell you some info.
That may be dreaming now days but it use to be that way.
Good luck. Let us know what you decide...and the outcome.
