Seems to me its a hit or miss. You assume the block wasn't honed but don't know for sure. You can order another standard "quality" timing set but if it doesn't fit you're still stuck with it. The 1/2" slop is a LOT, even with a .005 over timing set you'll still have slop (assuming the block is the problem). Right now I'd suggest finding someone with a set lying around that's willing to let you try it. Also, if you go to Rollmaster's website http://www.romac.com.au/Tunnel_Bores.html they have a chart that will tell you how much of an oversize set you need based on the slack (assuming the set you're using to check it is new and is a standard size).

Cloyes, Rollmaster and JP Performance sell oversize sets. Cloyes is pricey.

Keep in mind that if you suspect your timing set is the issue and it is a Cloyes, you could try a new chain. The sprockets don't generally wear.

One thing you could try (I've never done this) is to assemble the set upside down on a bench and measure the distances between the outer edges of the i.d. of the crank sprocket and the cam register (maybe have someone stretch the chain tight while you measure). Then deduct half of the i.d. of both. This will give you the cam to crank centerline measurement of the timing set. Compare this to the stock measurement of 5.125" and that will tell you whether the culprit is the block or the timing set.

Oh, don't feel lonely ... I'm dealing with the same issue right now myself - waiting for the new oversize set to arrive from the JP Performance distributor!