[STEELCITYFIREBIRD]

You need to get a real good look at the cam and lifters for excessive/accelerated wear on a single or few lobes. It appears fine metal went through this engine.

It likely is embedded in the piston shirts (cylinder scuffing), and it usually makes the wrist pins pretty tight in their bores.
Is there Any anti seize looking, but dark/feeling goop hiding in the pan or near the head bolts, under the valve covers?

You should check the line bore with a straight edge and feeler gauges, caps installed and torqued, and ID of the mains. Tooling to check ID accurately is expensive.
My best advice is order an assembled long block, put the original engine in mothballed storage.

What does the back side of the loose fitting insert look like? Does another insert fit tight, that fits tight elsewhere?