/6 rebuild advice

The milky foam has kinda got me in awe. I've had rusty jackets which were a done deal. I'm used to looking for oil in the pan not in the radiator. I know its possible but didn't expect it. I have a thermostat and will pull the water pump as well.
I say run it. See it if boils out of the oil. Give it a chance. It may take a while. When they sit up, moisture collects from condensation that forms inside the engine and falls into the pan and other areas, contaminating the oil. I wouldn't condemn it until you run it a good bit. Don't change the oil right away, because you won't get it all out if you do. Give it time to evaporate most of it out. You'll see it clear up slowly if it's going to.