Update and epilogue:
I thought that some of you may be interested in what we ended up doing with this engine...
As it turned out there was more worn out than we had originally planned on, and a MUCH higher price to repair them than we had budgeted for...
Long story short- It would of cost $ 800.00 for parts and (machine shop) labor. As crazy as we are, and as much as we wanted to have an original numbers-matching engine, that is too much $$ even for us for this glorified lawnmower engine.
Replace crank (VERY limited production run/availability do to an extra long PTO end specific for the torque converter drive system)
New head (spark plug hole stripped)
Replace rod
Rebore cylinder .020" oversize, including .020" OS piston/ring set
Replace valve guides
Replace valves
Line bore block and install crank bushing on flywheel side.
My son is not sure what he will do at this stage. The value drops big time w/o the original engine. He may end up selling it as a "roller" (no engine). it has been completely restored/rebuilt by my son and all of the mechanicals have been redone).
Again, many thanks to all that helped!
Michael