When i got my 78 it still ran but after pulling the motor to rebuild i found some of the cam lobes wiped. I'm surprised you didn't see the plastic from the timing gears down there. By the looks of it i would tear it down completely and see what you have. Gaskets, bearings timing chain/gear etc are a given for a refresh. Just an FYI watch out for those china made engine stands, I had fully loaded 440 on one and the weld broke dropping it on the ground!