Yesterday, My dad and I began dissasembly of the engine. After removing the intake, valvetrain, both heads and oilpan, the pistons and rods were removed and our suspicions became known. It appears that the noise was indeend coming from the rod bearings. From inspections it appears every one of them was pretty well used up, however the good news is that none of them were spun. The crankshaft does indeed have indications of wear and "scratches" a few of the rod journals. Nothing extremely deep but some of them will catch a fingernail. Another good note is that internally the engine appeared to be rather clean with no sludge anywhere.

Today, we finished off the engine dissasembly with taking off the water pump, harmonic balancer, timing chain cover, timing gears, camshaft, and crank. My dad remarked that the timing gears looked to be in good shape. The cam was removed and also appeared to be good, with no indicaions of anything abnormal. We then rotated the engine over to take out the crankshaft. The main bearings appeared to be in good condition as well with no abnormal wear.

Tomorrow, my dad is taking the block, crank along with the rods and pistons to a machine shop to have them cleaned and mic'ed. Whatever turns up will determine what repairs will be needed like if the block needs boring. My dad and a very knowledgeable coworker (who has been building motors longer than Ive been on earth) are not convinced that turning the rod journals ten thousandths to take out the marks and using a ten thousandths oversized rod bearing would hurt anything as long as the ends of the journals were properly radiused. Keep in mind that I dont plan on any drag racing or any other redline filled blasts with this car. Just to be on the safe side I will try to contact Coy Miller or the like this weekto ask what can be safely done to these crankshafts.
Thats all for now,
Jason P