I get calls on these at least once a month. Sometimes a couple a week. This is the block for the CA in the shop. There is a crack between the cylinders. This is very common on Allis engines, especially the 125 and the 201/226 blocks. I always have a hard time convincing customers that it is common, and really nothing to worry about. The liner seals to a fire-ring on the head gasket, and the fiber portion of the gasket will seal the water. What matters is the lower webbing. In this case it looks OK, but there is so much sludge inside I will have to clean to inspect. However from the lower side, it looked fine.
Don’t replace that block unless it is cracked on the lower webbing. I’ve had customers replace and spend large amounts of money for a block they didn’t need.