If it were me, I'd cut open the filter and check for shavings etc. Put fresh oil in it, so a compression check and if everything is good, start it up and run it for a while and get it good and warm, fluctuating RPMs, set the timing and carb. Shut it down, let it cool and check the oil again. Maybe change filter again. I would think it's most likely coolant that fell into the engine from pulling the engine apart.
