The head can be repaired by Clarence Lee, he advertises in MAN. Doesn't cost much for him to heli coil a head, he does great work too!!. Looks like it may have been the threads floating around in the case that caused the scoring?? Hard to say. I like working on engines so I would fix it. How do the bearings feel?? I would just replace the ring, fix the head and depending on the bearings maybe replace them. A good soaking in a crock pot and anti freeze would clean it up and a bit of work to clean up the gears. If you don't want it I will take it!!!
I would do the clean up first and then if it feels good send in the head to Mr. Lee.