id go ahead take the engine apart have the block and head machined and put new rings and bearings in it.. youll have a fresh engine with metal headgasket... youll be good for some nice hp....
when my buddy wanted a mhg on his 7mgte since it was too risky to machine the block with it assembled so we went ahead and rebuilt the engine since everything had to come out anyway... no since and going back with used bearings and rings..
as long as the cyl walls.. dont need boring and the crank doesnt need machining its not really that expensive... ended up costing him 1500 for the complete rebuild mhg and all new rings, bearing, seals, gaskets, and redone head of course thats with no labor cost on tearing down the engine and reassembling it since I did it for him with no charge....the machine work was 875 of the 1500 the rest was mhg, headstuds and all gaskets and seals needed... A machine shop in nashville did the machine work on it(usa motors).... took everything to them they cleaned everything polished the crank rehoned the cyl. walls and machined the block to the correct ra needed... plus they went ahead and mic'd and ordered the bearings for us... he also had the valves in the head reseated and shimmed along with new valve seals......and the head machined for the mhg... all in all very worth it... fresh engine with mhg done right... and who wouldnt give 1500 for a rebuilt engine with mhg done right.....
either way good luck....