metal in oil pan

Okay, just looking at the pictures my first thought on that large piece that it was a piece of a broken ring. For it to make it into the pan, if it came from a piston currently in use in the engine, it would have damaged the piston and scored the cylinder wall to make its way down into the pan from its position up top. That would be my guess. Long story short I agree with the above. You need to pull the engine down to see what you have. Why go to the work to install it and just have to pull it again as it grenades causing more damage.

If you are thinking of having it overbored (you don't say if you have checked the bore size to see if it has already been overbored etc.) don't just assume a .030 is what you need. Block may have been bored before, have too much damage to bore it or may need to be sleeved to repair the cylinder/s.

The overbore is going to require you or an engine shop remove the pistons from the engine anyway so you may as well do this now.

If you've had chunks floating around in the engine you may have damage to rod big ends, lifters, cam, crank, pushrods etc. Just need to pull it down and see what you have. If you are not up on engines and what it takes then get someone who is to help you. I would not use the previous owner to the engine though. Just a thing with me. Make sure whoever you use that they do have a definite grasp of engines, how they work and what to look for and have built a few themselves. Not a person that tells you that they have totally rebuilt their engine and when you ask them what they did they say "we put a chrome air filter on it, chrome valve covers, chrome timing chain cover........" and mention nothing about actually rebuilding the internals of the engine. Get someone in the know.

This can save you time and money especially if your mate or you have measuring tools to see where the cylinder bore is, where the crank and rods are etc. You may be able to look at the tops of the pistons and potentially see a previous rebuild overbore having been done. If you see a 20 or 30 etc. on the top of the piston buy itself then this is typically an id to the fact that the piston is a 20 or 30 over piston. You still need to measure for wear/damage.

I guess I should note here that if there is a heavy ridge worn into the top of the cylinder bores that you may need a ridge reamer to take that out so you can get the pistons safely out.

If the engine is damaged beyond use then you've saved a bit of money by finding that yourself and I'd start saving for another engine. If you have a pick and pull type salvage yard then that might be a good source for you. The local one here an engine goes for $150 plus a $25 core. Loads of 318's and a few 360's and bigger in the cars. Bring a mate and pull it using the yard's A frame and have them fork lift it to the truck to take it home. Take the time there to have a good looksee what condition it looks like before you buy so you can try and get a good one.

If your engine looks repairable then verify measurements (machine shop and do this for you too if you are unsure) and see where you are for a rebuild. Where it specs is going to determine the size of parts needed etc.

On any engine I get I aways pull them down, check them out.

Blathered on a bit, sorry. Hope that helps.
Cheers