Hey Alan. I just got back in town.
Here is what I see.
Your cylinder head insert doesn't look too bad. It doesn't look like there are any high spots. You can replace it if you want to, but you don't need to.
You can take a piece of glass and a sheet of 400 grit sandpaper, get the sandpaper wet and keep it wet, and work the cylinder head cover in a figure 8 motion to remove any high spots. You'll have it nice and flat when the entire surface is uniform shiny. You can do the same to the cylinder head gasket area after you remove the studs.
There's definitely something strange in your water pump cover...
Your impeller looks stained, but healthy.
The skuz in your water passage at the base gasket isn't good. Was there any in the other passage? If memory serves, the 250 has 2 base coolant passages in the cylinder, but only 1 in the cases, the right front.
Those cracks look like bad news to me, as does the amount of steel removed off the intake face of the sleeve, but if MotorGeek isn't concerned, it isn't a problem.
I see rust colored stains in the cylinder water passage. There is no bare steel in the cooling system that I can think of. Hmm.
It needs a bore. No big deal there.
Whoever ported it did a good quality job, at least that's what it looks like to me.