Pictures cam be deceiving, but it looks like also a little rust from condensation and sitting. I've seen worse brought back. The MMoil is a good suggestion, and your going to have to run the car along enough to boil all the water vapor out. Not overheated, just normal temperature for maybe an hour. Change the oil and filter, and start over with all fresh, including the MMO. Make sure you use an oil suitable for flat tappet cams (just search zddp here, there's plenty of opinions). You might even want to pull and clean the rocker assembly, and wipe out the head. Follow Greenbird's suggestion, and look for fresh oil up top. The older iron rings took a lot longer to seat, but will sometimes free up and run back in just fine. I assume you've got an oil pressure gauge, and you're showing ok pressure. If not, that should go on the list. If worst comes to worst, these are all things that will be needed anyway, so all you've got invested is a little time and oil.