Ford's were normally parent bore engines unless they had repair sleeves installed.... and some did come that way from the factory. If there's no coolant in the bottom end then the block is probably fine. Get it running and see if it's pushing coolant out the overflow. Look for pressure against the rad cap, bubbles in the rad or plain old black froth in the rad. That would suggest to me that it's got a bad head gasket which is not an entirely uncommon thing with them. It's about a 200 buck fix if you do the labor yourself. Usually it's just a new gasket... and I like to lap the valves and install all new upper gaskets and check the injectors while they're out... Also make sure to chase the head bolt holes with a bottoming tap and clean them good and check the head for flatness with a machinist' straight edge. It may need planing; it may not. After rereading your post... I'd say it IS a head gasket problem. Just check it out for bubbles when it's running. Does it puke coolant under load?
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