Help!?! Just took apart my 360, and found bad things!

Nothing to lose any sleep over there. I would just go ahead, make your upgrades & put it back together. saw your other post about checking the bore size, go ahead & do it, but again, if its been bored, I wouldnt get all hung up about it. You can clean the carbon off if you want, I wouldn't even get too concerned about that. If you are douibtful about your ability to rebuild a short-block, dont touch it. theres nothing visibly wrong there, it ran good, so make your changes & put it back together.