Yep, that's what I've decided on.

The engine was sold to me as coming out of a running car, already RWD converted, new water pump and lightweight flywheel. At the time of payment everything was sweet.
I paid for it in late December 2012, and it was to be shipped from NSW to me in VIC, but that didn't happen. My old man and I drove up in April 2013 and personally picked it up - the seller in hiding. The engine was left on a crane in his driveway.
The seller is an absolute dog and I have nothing positive to say about him. But I know I'm never going to get anything in return and I'm not a person to seek retribution.
All I'll say is never buy anything major unless you can do it in person - and I've done a lot more to cover my ass in major transactions from there on in.

The problems on visual inspection are surface rust on the crank, very lightly on the bores, 2 valves jammed open (not able to move at all) rust on the cams.
It appears it'd had a blown head-gasket, however the gasket itself is in good condition. Which suggest it's actually a problem with the head itself.
I know it had been sitting since April until now, but we've kept oil in it and turned it over. But the internal damage suggests that it was off the road for a lot longer than that, and stored possibly outside.
My mechanic has told me that the bottom end isn't a big worry, but that the head has the most issues.

I'll shoot you an inbox mate!


In other, more positive news!

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Car is rubbed, masked and ready for paint - tomorrow hopefully.

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Picked up a pair of AE82 indicators. I wasn't sure, but yes, AE82 front indicators fit in AE86 front zenki bumper bars. You just need to drill a small hole.
My housings were all smashed up and poor condition. Also, will probably make up some clear lenses. Haven't decided whether to cast some, 3D print some, or just be lazy and use fluoro light covers haha.