Hmm. @IDIBRONCO what do you think?
I'll second this one. I've never seen one quite like this, but that doesn't really say a whole lot since the ones I used to change out were being used and not sitting to let the valley pan rust through. I'd be more worried about what the crank and rods looks like. Also the lifters since the water came in through the top of the engine.I would worry about it. These engines have roller cams, so there’s not a lot of wear between the two components.
It looks to me like it has already had emery cloth ran over it. It appears to have verticle buff marks on the cam lobes. Or maybe I'm seeing oil streaks from being wiped off?