This is the 401 from the 60 Invicta that I just bought. What does that piston damage look like to you? There is no obvious scoring or groove in the cylinders, but those piston look horrible!
It looks like there was an awful lot of water in there. Were the head gaskets shot? I don't think I've ever seen it that bad, I had the 401 in my 60 Invicta detonate the #7 to bits because I ran regular in it, but never something like that. If it was running before it came apart, that would have been impressive.
Looks like the engine was outside, uncovered, with water in it for decades. What looks like water damage to me is on an incline, like the engine was resting on the oil pan , tipped forward, with the dampner on the ground.