Let us know if that is rust on the top of some valves and in some of the pushrod cups, or just some sort of crud. If rust, then rust is an abrasive and running it like that will chew the heck out of those parts. And rust circulating around will chew up further parts. Waste o' time IMHO if it is as rusty as it looks.... Any rust deeper on the inside, like on the oil pump gear on the cam, is problematic. That gear is already a weak point. Seems like whoever jacked the car up by the gas tank also left the valve cover off for 20 years.....goodness.
BTW, when you pull the filter, you will see a tube sticking up out of the center. That is a standpipe, that keeps some of the oil from draining out of the filter when it sits. The filter relocation is an interesting idea, but not necessary as indicated.
