Need advice on what to do...

Elbow grease is CHEAP.

I say pull the engine, degrease, detail, gaskets, and re-install.

Somewhere along the way, somoene might have a header, 2bbl "super six" conversion, chrome valve cover, etc that could be installed for a detailed underhood like Memike's.

Time, degreaser, and rattle can paint cost almost nothing, and can go a LONG WAY.

When it comes time for the larger painting, much of it is preparation time. You can buy supplies to prime, body and paint a car for a couple hundred bucks.

Yours and back to basics ideas are the best here! I would do them both!:-D
Man, you got some real skills!!