Engine is open, pistons are out. This is what I've found.
#1 cylinder sleeve wall is cracked or corroded:
#1 piston looks decent but has a broken oil scraper ring and two of the three other rings are stuck. Shows some vertical wear, but not sure if that's an issue.
#2 cylinder sleeve looks OK visually, might be able to hone it
#2 piston is dirty, but has no visible wear. Oil scraper ring is broken.
#3 cylinder sleeve has several vertical wear marks. Not sure if it can be honed.
#3 piston shows very noticeable vertical wear marks.
Timing set looks good. A little crud on the cam gear. Coolant hose was full of some sort of crud.
Injection pump was a royal pain to get out. The throttle/governor connects to the pin sticking up at the bottom of the picture. That's connected to a bar that slides side to side. The governor is connected to the pin with a collar and cotter pin that is almost impossible to get to inside the engine. That's stuck on mine and the pin/bar was impacting the side of the case when I tried to pull it off. I had to take the timing cover off the engine to get something in there to tap it back to the center. So that's a problem, I'm sure... the spring that moves it isn't super powerful so I think that should move pretty easily. Likewise, the three rollers that ride on the camshaft are spring loaded. Note the middle one stuck in.
Next step is to take it to the machinist to have the #1 sleeve removed and the block
& head checked for cracks.
#1 cylinder sleeve wall is cracked or corroded:

#1 piston looks decent but has a broken oil scraper ring and two of the three other rings are stuck. Shows some vertical wear, but not sure if that's an issue.

#2 cylinder sleeve looks OK visually, might be able to hone it

#2 piston is dirty, but has no visible wear. Oil scraper ring is broken.

#3 cylinder sleeve has several vertical wear marks. Not sure if it can be honed.

#3 piston shows very noticeable vertical wear marks.

Timing set looks good. A little crud on the cam gear. Coolant hose was full of some sort of crud.

Injection pump was a royal pain to get out. The throttle/governor connects to the pin sticking up at the bottom of the picture. That's connected to a bar that slides side to side. The governor is connected to the pin with a collar and cotter pin that is almost impossible to get to inside the engine. That's stuck on mine and the pin/bar was impacting the side of the case when I tried to pull it off. I had to take the timing cover off the engine to get something in there to tap it back to the center. So that's a problem, I'm sure... the spring that moves it isn't super powerful so I think that should move pretty easily. Likewise, the three rollers that ride on the camshaft are spring loaded. Note the middle one stuck in.

Next step is to take it to the machinist to have the #1 sleeve removed and the block
& head checked for cracks.