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Argh, more bad news. I called the machine shop to find our which oversize pistons I should order, and found out about a crack between the intake valve seat and cyl bore. ruh-roh.
Now I know why these projects take so long, all the tings you find out along the way. Somebody mentioned that I should check for cracks and head gasket leaks because of the damage to the intake valve, and it looks like he was exactly right.
So, either stitching and/or welding, perhaps a cylinder sleeve and new valve seat....The machine shop will send me a better pic sometime of the area cleaned up. They're also going to ask around to find somebody that can fix this.

Looking at this pic from the dis-assembly, I think I can see the crack.
Man, what's a bare block weigh, 150 lbs? I could barely move it with one other guy. Shipping an intake manifold looks easy compared to getting a new block....

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Tough luck! I had a 54 359 sleeved over 10 years ago for the same reason. Also used the opportunity to have hardened exhaust valve seats installed. Current owner drives it several times weekly & says all well and going strong.

The machine shop sent me some pics of the crack in cyl 4...insert explatative here...

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Nothing a sleeve couldn't fix.

Looks almost identical to the 54 I had sleeved.

What about the area of the crack between the cyl bore and valve seat? If I have a sleeve put in, that will take care of the crack in the cyl, but what about the rest? Does that have to be stitched or welded?

What usually happens is the machinist drills the crack and inserts pins to stop it from cracking further. It's a little more technical than that, but I figured I'd give a simple version.

Well, this past saturday most of the underbody got painted and looks a lot better. After long hours of grinding and treating surface rust, a first coat of paint went on. Nice to see a difference.
I was able to remove the clutch torsion shaft. I pulled the woodruf key out with some vice grips. That got it. parts are now clean and waiting for paint
Since the fuel tank is out, I had been soaking the fitting for the fuel line and was paranoid I would strip the fitting in the tank hole. 1/2 open end wrenches were going to stip it, but I cut the metal line off just before the fitting and was able to get a 6-sided deep socket on the fitting. That was the ticket! Hope the new line goes in easily also when I get to that...

On the engine front, I think I will be able to use the 1951 288 from Kurt's 54 Pacific! This should save me quite a bit on shipping a block across the atlantic, or sleeving and welding my old block. I have yet to decide if I rebuild this 288 block with my 327 crank and rods, or rebuild the 288 as a 288, or just do a checkup and partial rebuild on the 288. Guess I'll do a compression test, and then pull the head to determine the condition of the engine.
Hmm, the manifolds are off of kurt's 288 right now. I can still run a compression test w/o manifolds right? Just have to be careful I don't suck anything in when cranking the engine.
Kurt's car is going to be a custom sled, so a V8 of some sort may go in it.
The packard club of Austria will have a spring cruise, so it would be nice to be ready for that

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Looking at the intake valves from the engine I had in the car (The one that lost rings)...and Holy schnikeys are they full of deposits on the back side.
Is this because I didn't 'Burn the gunk out' by driving it hard enough, or from using lead additive, or not from using something like chevron techron or another fuel system cleaner? Bad valve guids? I don't want this to happen to the next engine I have in this car. Just spent a day wire-brushing the other valves from my 'new' engine, which were not nearly this bad. Thoughts, opinions?

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They don't look bad to me. Back when we burned leaded gas I have seen valves way more caked with deposits than those. Older engines with carburetors do not run as clean as new ones especially once they start to burn oil.