Yes, this is the conclusion I've come to as well. I fished around in the hole with a magnet and picked up quite a bit of metal, but interestingly, none of it was from fresh thread damage, (sharp silver curved bits). it was all quite small gritty chunks caked in oily grime. Clearly not freshly damaged thread material. I know, Ive messed up enough threads in life. This really seems to be old corrosion damage, or corrosion that happened after threads were messed up during the rebuild in the 90's.
So, my thought is that during its 20year improperly stored sleep, some liquids became acidic, probably coolant, and attacked the metals in the head. I need to see what other issues are there. I know the water pump vanes were almost completely missing from corrosion when I changed it. I don't see how the head would have escaped this sort of corrosion, so it makes sense to deal with it properly now. I'm kind of thankful to find out this way, with no overheating, blown gasket, or other nasty catastrophic damage.
Has anyone experience with using Time-Serts for this type of thread repair on the head? I've used them for a spark plug repair and was amazed at the better-than-new result. When I pull the head I'm putting Time-Serts in the other 5 spark plugs and if it goes as I hope, I'll do all of the head bolt holes if they appear to have been corroded as well.
time to TDC#1 and break out the tools. Thanks for the help!