hmm for loctite use blue not red

1st thing is 1st make sure the engine has pinch. take it and rotate the flywheel if the piston has resistance near the top of the stroke that is a very good sign.
Also don't doubt yourself if you think there is a problem there probably is one.

I've bought like 6 or so used nitro RC's and out of those. Only 1 had a good engine which was good, and didn't need more in parts then a brand new engine to repair it.
Hell my 1st RC was a used nitro that I spent many hours trying to figure out thinking I was the problem. I bought a new engine, and had 0 issues again.

looking at the condition it is in in the photos I would expect to have to replace the air filter, possibly the engine(or at least the sleeve and piston), the fuel lines and possibly the gas tank if it wasn't drained.

as for servos generally they are separate. IF you want to go cheaper for radios look at a flysky radio like the FS-GT2 (I have had one for over 10 years). As for servos see if what is in it work if not you can get servos dirt cheap off amazon. And when I say cheap last time I bought a pile of servos for a robotics project I was working on I think I spent $15 for 4 where I used to spend $15 a piece for the cheap ones >.>