360 running on 4 cylinders

Looks like water or coolant sat in that hole. If it's only in one cylinder, I'd suspect head Gasket or some other means of entry (like a cracked cylinder wall, pinhole, cracked head, etc). If it was rain, condensation, or from it sitting after a head swap (people will leave water/coolant pooled in cylinders sometimes, I don't know why!) it usually shows up in more than one hole.

Machine shop should be able to rule out the expensive causes..