Let's rebuild a 350 (maybe), PT.1

[C-10 simplex]

Basically, what happened with this 350 is that cyl#4's exhaust valve somehow got in contact with the piston and actually broke off and imbeded itself in the piston; Before taking the head off, i noticed that the pushrod for #4's exhaust rocker was bent and the rocker was loose. This prompted me to take off the head to investigate further:





#4 piston:


Also, if it makes a difference, cyls 2 and 6 were full of oil and probably a mixture of oil and water:


What originally happened was that the engine started to run funny----the vacuum gauge swung wildly in pulse with the engine and the engine would stall out under 900 rpms.

So, this prompted me to take the engine out and put in on a "test stand." The last time i tried to run the engine, i added more water to the radiator, but then water started to come out of the dipstick tube(there was apparently a small hole in the tube):



This, then prompted me to take the rocker covers off which led to one "gruesome" discovery after another with the exhaust valve etc.

Water came out of the pan like so after the oil drained out:


The reason for the orangeish color is not due to rust----this is the new Dex-cool extended coolant.

i'm trying to be practical here and decide to rebuild or get a new, reman(or even used) engine.

So, please list all the possible reasons for the above AND in the order of likely hood.

P.S. i took this head off 4 yrs ago to replace head gasket (which turned out to be unessesary due to mis-diagnosis of another problem) i don't remember if i used sealant on the head bolts, but i could possibly find out soon by looking at the books i used.