Block deck pitted ?

[Z28ricer]

Ok, so i bought an S13 with a redtop / auto in it, it had rod knock when i got it.Went to JDM addiction and purchased a longblock....Installed said longblock, wouldnt start, finally got it to start, didnt run right, next day it wouldnt start, pulled the valve cover to find the exhaust camshaft broken just behind the sprocket...

Called them about possibly warranty, wasnt getting too much info from that end, figured maybe i could put the head from my rod knocking motor on it..

During removal of the head i found the intake cam sprocket bolt was loose as can be, and one of the cam journals on that side is pretty torn up, the engine is really clean inside, and i figure maybe it had been recently rebuilt...Upon getting the head off and trying to clean the deck since i was thinking of installing my head from the other engine on it, i found around each bore it looks as though its pitted, its kinda deep not just surface stuff...

Has anyone seen anything like that ? Know what might have caused it ?