The case is junk, the top end is junk, the clutch cover is junk, the top cover, junk likely. etc etc etc. Not a matter if ugly as much a matter of TOSS.
whatever got into the piston there, odds are there may be pieces in the bearings....therefore, the bottom end needs a rebuild. ...case split, new bearings gasket kit etc etc etc. I've done this too many times to not anticipate some serious $$. There isn't good AM support either, so its not like you can just cheap out on certain parts.
Intake.... yes you can convert it to the boot and get an AM cylinder (AM cylinders only use the boot not the intake block). but then you also need a different carb and boot and adapter etc. All of this turns into a much bigger job than you anticipate very quickly. I don't really need another project... so I'm just a tire kicker here, but whoever gets this project needs to understand that its a project. 394 stuff isn't cheap....