The recommended advice was to simply buy a new crate engine instead which often costs the same as rebuilding an old engine and will ensure you don't have any nasty surprises and end up spending twice as much.
Unless you really really want to build it yourself, I agree. I built one, now I know how it's done. Based on what I spent on it and the lessons I learned the hard way, I will buy a crate engine next time around.
Nothing wrong with either choice, just know what you're getting into. If it's long term, here are a couple suggestions:
1. Put together a budget and be honest about what it is and how close you'll stick to it.
2. Plan it all out and stick to the plan. Changes halfway through are expensive, not to mention that previous choices may block you from a change you want to make. Better to figure it all out from the start.
3. If you've never done it before, it pays to find an experienced mentor. I had a great one that saved me from screwing things up _very_ badly on many occasions.
4. Find a good engine building forum, pay attention, ask questions, and figure out who is full of BS and who knows what they're talking about. Everyone on the internet thinks they're David Vizard. After a while you can tell who builds engines and who reads Car Craft.
5. Be realistic about your power goals. Everyone wants a 500 HP monster, but depending on your gears, 350-375 will probably make you smile every time you drive it, and it will be much easier to get those numbers and trust that it's going to run every day.
6. Speaking of gears - take everything into consideration when you make your plans. Where is your driving range (RPM) and how does your gearing and tires affect that? This will be important when designing your engine and where the power will be. Driveability is the key.
7. Don't believe the hype. 9 times out of 10, you don't need racing parts for your DD.
To answer your specific questions (and I'm definitely no expert):
1. Jessie James is right - look for cracks, but you may need to take it to a shop to get it magnafluxed to check for cracks you can't see.
If you really want to get into it, and you're looking at a bare block, get a dial bore gauge and check the cylinder for roundness.
Check the bores condition. Deep scratches? Other irregularities?
In reality, if you're building a high performance engine these type of things don't matter much since you're going to be getting it all machined anyway, but you may as well start with something nice if possible.
If you can get a high nickel block, get one, but it's not necessary. These are marked with 010 020 under the timing cover.
If you can get a roller cam block, think about starting with that. The reason is that with a flat tappet cam you'll need to use oil with a high zddp content. Not a huge deal, but it limits your choices with oil and makes it harder to go down to the local auto parts store and pick up a couple quarts if they don't stock it.
(I don't think you can get an 010 020 roller cam block)
2. Everyone will tell you to get a 4 bolt block. If you're racing, go for it. It's not necessary. That being said, I would rather use a 4 bolt than a 2 bolt. But if someone gives you a 2 bolt for free, take it and run.
These are some things I can think of, but there's a lot more information out there. These are just suggestions - I'm just a guy on the internet who reads Car Craft, and I'm not David Vizard.
Pick up some books and read.
