I have a '69 124 and finally got it to a great Fiat guy here in town (Phoenix). I had oil leaks and poor running and lots of other issues. He needed to replace the head gasket and when he got to the cylinders he didn't like what he saw -- some rust or other type of corrosion inside one of the cylinders:

Also, but not the main point of this post, the valves were rough:


Now, I'm not sure what to do. My options appear to be:
1. turn the cylinders (2nd bore, .4 mm), buy new pistons & rings
2. buy a new short block for the 1.6 engine, which seems difficult to do and who knows what condition it will be in
3. buy a complete 1.8 engine from a 70's 124
I would love to hear your thoughts, and of course if you happen to have any of these items or know where I might find them, that would be great. I would love to get this car on the road again, but I'm afraid of the costs.
Thanks so much for your thoughts and ideas on this project! Here are a few more pics:


