Pretty much finished rebuilding my engine now, so attention turned to the interim engine I bought from a bloke off here.
It has newish head seals and shiny head nuts, but ran badly, had low oil pressure at idle and smoked like a chimney, so was keen to see what the insides looked like.
Outside:

First clue it might be a bit of a mongrel - DF heads on a later case.
One snapped head stud:

Worryingly, the corrosion was about 50% of the way through, might have replaced this if I'd been rebuilding!
Next up, all the piston rings had been installed with the gaps in a very neat straight line - you could see the oil staining up the side of the piston - found my smoke source!

The heads themselves had lovely new head seals, held on with clear silicone sealant (think bathroom and kitchen rather than automotive) :

Split the case and this fell out:

No 2 Main bearing, well and truly mangled. Looking at the back shows:

Yep - the bearing was fitted so it blocked the oilway drilling, so No 2 main ran pretty much dry.
A list of broken / badly fitted things so far:
1) Heads fitted with silicone sealant
2) One liner had two bottom seals, the old one and a new one over the top
3) Liners ridged at top, so all top piston rings broken
4) Piston ring gaps aligned
5) No 2 Main fitted so it can't oil
6) Bits of stray silicone sealant all over the place
Despite all this it still ran (albeit smokey and with low oil pressure) - just goes to show how bad things can get before it stops working altogether!
I'd love to know who did the rebuilt - a DIY or 'professional' job?!
Looking forward to getting the cam and crank out to see what the remaining bearings look like, and to see if there is anything other than the heads I can save!
Cheers,
Alex