The engine rebuild is moving along: the cylinder head is still at the machine shop, and the block has joined it there, but we may not continue with the same block.
I knew that the block had previous issues with a dropped thrust washer; the rear washer had dropped before i started working on the car, and after taking it apart it was obvious that it had also happened at least once before. The thrust washer is a known weak point of these engines, because it only covers 180° of the crank face, and is prone to accelerated wear if the clutch is pushed in when the engine is started.