Troubleshooting Head Components

That's actually a light layer of sludge. Not too bad, really. With all the work involved, there's no way I'd put that head back on without having it fully reconditioned, including having it milled. I agree about not having the guides knurled. That's a quick fix that really doesn't last any time at all. It'll likely need new guides and maybe even some valves and possibly some seats. Or, you could just slap it back together like Dan said. But then you will have fixed nothing. Your call.