This is starting to make sense now!
Dave Sponaugle on FTE (IDI forum moderator) had several reman engines do this to him. His situation was the ONLY other case I ever saw of an engine with a rotated piston, cracked block and shifted sleeve. The 3rd engine they sent him got torn down right on the shipping crate where he found the sleeve already dropped. I think the brand was "revivia".
Several months later he finally got his refund after much fighting. In the end he went out and bought the cheapest core he could find on short notice from a wrecker. Without any known history of the engine, he built that 6.9 into a fire breathing moster that has outlived all the rebuilt engines put together. His story is why I, and many others, are very skeptical of any sleeve job in an IDI. From what I remember the method that was used in his case was some sort of locktite goop that was supposed to glue them in place.
My bet is this is one of those "glue-in" engines.
I've since heard from members here on OBN that there are better ways to install sleeves that use sholders, and better interference fitting to prevent a dislodged sleeve. I seriously doubt this block can be salvaged.