Oh my god that head looks horrible. I would just disassemble it and clean everything up and hope there is no corrosion on the lobe surfaces. It does NOT look promising, and what about the rest of the valve train; the springs, lifters etc..
A couple of thoughts (and personal opinions, others may or may not agree):
- I hope you are using some assembly lube or at least motor oil when putting that thing back together.
- If you leave it sitting for a while, protect exposed surfaces with something, WD-40, CRC 5-56, motor oil (and clean up when continuing) Those machined surfaces can catch rust in minutes.
- Just as Duncan said, always assume there is some shit left over from the machine shop. Always do a proper, thorough check with a good lamp for any left over swarf etc.
I found pieces of the old valve guides in an oil channel by shaking the head and hearing rattling noise. Scary shit.