I agree with Tom regarding the valves and a tear down. The quality of work represented by permatexing the ( old?) gasket, using old valves, the odd seat situation, etc, bears further investigation before you invest time in an installation. It will be time well spent rather than gambling that time spent installing it first will not require a tear down later
It might need a proper valve job. I would also plastigage the bearings. Its possible the tightness is from someone adjusting the bearings too tight and expecting to "burn them in".
When the pistons are off the crank you can feel if they are stuck by moving them through the cylinder. Run a feeler gauge up the skirt when they are at the bottom of the cylinder. Clearance should be no less than .002.
What does the cam timing gear look like? Its not unusual for one that has been sitting to tear off part of a tooth when its first moved. The ones with the metal center are junk and should be replaced anyway.
Every engine from an unknown source (and one from a known source) that I have torn down needed something corrected that would have driven me nuts if I had installed it first. If only for the sense of certainly about the engine's condition (and its usually much more than that) I've never regretted doing it.
