I went to the machine shop on Friday and had a chat with their head guy. We measured and discussed the build, and there are a number of ways that they can reduce cost based on the objectives. Some is reusing some of the existing parts in the valve train and other are just critical evaluation. These heads already have the larger valves, so that is a good reason to use them. The quote they gave me was assuming it needed everything. So I think we are on track to chopping a whole bunch of money out of this rebuild.
We did consider shipping them to the US to be done, as suggested here, but decided that with the revisions of scope the price would be more manageable, plus it's always nicer to deal with a local guy if there ever is a problem down the road. Having it done locally also saves a whole lot of hassle in packaging and dealing with shipping and customs etc. and that was worth paying for to my buddy.
Regarding the question above about "what happened", the short answer is we don't know. Car was last on the road in 1992, and odometer is showing just over 100,000 miles we presume, since it is a 5 digit odometer and the rest of the car does not look like it has 200,000 miles. (change to metric wasn't until 1977, so no KM). It was then partially restored and the owner either ran out of time, energy, money or all of them and it has been in storage for years. My buddy basically bought the car for the engine and the centre console, as that was a fairly rare option on 300's.
When we took the engine apart the left front bore had noticable wear ( I forget the numbering scheme if that's #1 or 2), but when it ran it didn't have any blue smoke. We didn't drive it enough to see if it used any oil, as the brakes were pretty marginal. Just did a few loops through the neighbourhood, then yanked the engine out .The head gasket was shot, it was clear that there was blowby between cylinders. Compression was fairly even, from a low of 120 to a high of 135. Seemed like low pressures for a 10:1 compression engine, I would expect to see about 160. Bearings looked very good though, not many miles on those, so maybe the "rebuild" consisted of putting in new rod and main bearings? Who knows. Crank looks good, it will just need a light polish. Pistons are shot, as there is excessive side clearance on the ring grooves, as I expected.