Not trying to be a "downer" here at all -- and I know you're having a ton of fun with this project...
BUT (big butt) -- that motor "appears" to have been very hot at some point... that oil and dried "burnt" looking oil on the front around the crank snout - that would worry me... a lot.
Does the motor turn over "freely" etc? Have you looked and or checked any of the crank or rod journals?
It's non of my business of course - and I'm certainly no "motor guy" -- but it sure is DARK...
