318 timing chain.....and why the engine should come out.

I would tell you about the exhaust stem seals...
Except they aren’t there.

They are all ground up into dust and went into the pan.
View attachment 1715346301-

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This is what it looks like after hitting it with compressed air.
There is some sludge in there as well.

Now, you don't know that for sure. Did you see any remains of exhaust valve stem seals? Some engines did not even have them. They really aren't needed. Earlier engines never had them. If you can see no evidence whatsoever, it probably didn't come with them.