Look at the button and or lack of head shims - I can see this motor detonating like crazy. I know a misconception of these motors - people believe that if you remove the shims / a shim - it makes the engine faster - it will raise the compression - but not necessarily the performance. Looks like something went south in the engine and someone tried to clean it up to get a fast buck.
I've bought used engines in the past but never got what I thought I was buying. I like to rebuild my engines and take great care of them. I have loaned my backup engines to fellow racers in the past and sold one - but really the only reason I would buy a used motor is for the parts and not for the mill.
I would mic the crank pin inspect the bearings very closely. Take a look at the rod bushings as well and mic them if you can.