When I get the head off today ill post some pics.
Seems to me you have two options, the first being the cheap one. Since you already have the parts for a head swap, squirt some wd40, or some kind of lubricant in the cylinders, spin the crank, see how much the rings can scrape off, clean it as good as you can, put it together and cross your fingers.
The next cheapest option will be a used engine swap. A good way to do it is to go on eBay, search within 50/100 miles or whatever you feel like driving, and look for any 4.6. These junk yard are idiots when it comes to listing engines. Last I looked, you can get an 05/06 grand marquis, or crown vic engine with 70k miles for $600 when 96 mustang engines were twice that with twice the mileage. There's a few cars that had pi engines other than mustangs, just get one of the ones from a fwd car.
The reason I say to look reasonably close, you can make them an offer for less, and if they don't have to deal with packaging and shipping it, they're more likely to accept.
I'll see about getting a hone and some rings. What hone do you suggest? Also I tried acetone, didn't work to great. I was thinking about trying some muriatic acid but I know it can cause more rust if I don't use it right.If you've got it this blown apart, I would say stop half assing things and pull the motor. I don't think a simple wipe and go is going to pan out very well. You're probably going to have a ton of blowby. Yank the engine, run a hone through, and throw some new rings on it.
If you do elect to keep doing this route, let some ATF and acetone soak in the cylinders for awhile. That will free up stuck rings pretty well.