WOW- Can't believe the PO didn't clean or replace the rad before ripping into the engine...
That rad looks badly plugged and almost like Mud in between some of the cooling fins. Can't see how it could do a decent job of cooling the engine.
( If- it were mine) I would check the head and block for straight, check the oil that is in the oil pan and if not milky do as was posted above with the cylinder bores to make sure no crap is lodged above the piston rings .
If- the head/ block passes the straight test,
Take the head and fill the intake exhaust ports with a bit of diesel and wait about 2 minutes -if diesel is not drooling out between valve and head seats... buy a head gasket reassemble the engine. (after cleaning the head /block surfaces) Making sure to follow torque down sequence and torque specs.
clean as best you can the radiator flush some water thru it and re install, use new oil and filter and see if she will run.
If- It will run without billowing smoke , excessive Knocking , and no bubbles running thru the coolant/water in the radiator either have a rad shop go thru it or if not to pricey replace it and the thermostat.
This is just how I would approach it , but am CHEAP by nature, this way you are only out the price of a head gasket oil and filter and some RTV sealant and will know pretty quick whether the engine is basically sound or not. If the engine oil in the pan is Milky, I would not reassemble the engine as is.