340 head gasket questions

Time to take the block back to the machine shop and have them clean it right!
I agree..... one local shop here has a 'rust tank' where really rusty blocks and heads go into for a few days. It never gets it all out but it'll do a lot better than what is shown here. Be ready to change the coolant in the engine 1 or 2 times after running several hundred miles each time. You would be surprised how much comes out later with engine heat cycles and constant flow/immersion when things are this rusty inside.