I'd go with numbering rods, pull the motor apart looking everything over carefully, and having a qualified machine shop measure everything, to find out where you're at now.
What's that orange stuff in the valley?
Looks like a pretty big ridge in the bores, also maybe issues with oil consumption & leakage. Dampener rubber ring looks rotted. '78 would have low CR, and I'd definitely bump that to a real 9:1. To me, that increase in efficiency & torque is more important than having a rumpity cam in an SUV.
Compare price to rebuild the heads (valve job, guides/seals/springs) vs aftermarket Stealths/Eddys/etc - last set of Stealths I bought were from an unbuilt project, there are some deals out there. By the same token, every Eddy & Stealth head I've had got some more work done, but some guys are happy with 'em out of the box. Your crank & rods should be OK with little work.