Given the unknown history of this engine, I would:

- Measure the distance the pistons are protruding from the block, and have them shaved by that amount plus a margin to account for stretch and slack; I'd have to look it up, but I think .003" is the norm

- Remove the pistons and rods, and have the pistons machined

- Replace the rod bearings; you probably damaged them with the pistons hitting the head.

- After block assembly, do a full cc of the engine to ensure that the compression ratio is legal. This block has obviously been machined, and it doesn't take much to increase compression by the legal 1/2-point; I'd bet a dollar that your compression ratio is illegal for Improved Touring.

GA