"Wondering about just yanking the engine to just do main and rod bearings and perhaps the rear main seal. Freshen up some gaskets, paint it, then reinstall. Can deal with the timing cover while she's on the engine stand.

Thoughts?"

I would never take a tight engine apart unless testing indicated that was necessary. You said compression was good so I would expect the rest is fine. I would think that hole developed when all that crud sat there and ate away at it. I doubt the engine was run with the hole otherwise all the coolant would have ended up in the oil pan. If there was still coolant when the hole developed it would have seeped inside the oil but you said it sat for 10 years so an oil change would have removed it. The timing cover is available new but is getting expensive, like everything else. If buying used watch for pitting and corrosion. FWIW I have never seen anything like that there. See Oly's thread he started out with a pretty bad situation but it cleaned up OK. Oly's 1968 convertible thread