The most important factor from your initial post is to make sure all the caps are still assigned to a particular position and to a particular block. No mixing and matching! The rust, unless really bad can be dealt with from a line hone which is probably needed anyway with that long block. When this is done, make sure the machine shop understands this is an OHC engine. They may not realize this 50 years later. As material is removed to line hone, the camshaft timing will retard slightly. Not much of an issue unless they really go crazy or this is the 2nd or third time it's been line honed. You really don't have much choice re-using these caps. As hard to find as the OHC blocks are now, you don't want to scrap them unless really not usable.
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