We are walking down the same path! I just picked up a 400 long block, actully it was everything but the intake and cam. The heads were off and the pistons removed, only the crank was "installed" on the block. I noticed the same oblong areas on the cylinders.

So I think we are "in the same boat" and OK. the only things I noticed was a few rods were bent and the water jacket and passages on mine are rusted some. But I have been told a hot tank on it will clean it like new.

Lets keep each other informed of progress, cause I have alot of questions also.

The pics are of the obling areas on the forword and rear most cylinders