Have you been changing your blinker fluid? if so I`d also check the Flux Capacitor and muffler bearing. Better safe than sorry.

I have been following this thread for a while and had to chime in. I had the exact same problem in 2007. The head was cracked between the #7 valves and there was a crack in one of the other cylinders I think 1 or 8, so I replaced the heads with Edelbrock RPM heads and upgraded all of the stock fuel system. I also upgraded to Imco PowerFlow exhaust. As someone else stated, you probably had hurt it before it actually went DOOM. I would say you are looking at new heads, but maybe you will get lucky.
Sorry to hear about that failure, Good luck!

Your about right.. so here's the verdict;

Cracked head, between valves, #7. The other head is also cracked.. both junk. Scratches in 2 cylinders are beyond Hone. So it's being bored to .060. new pistons, re-balance, etc. The rest of the lower end is beautiful, so I'm just gonna put it back together.

Getting a new set of AFR 305's. I'll need to add some Guide clearance to them. and of course I'll be purchasing a new set of pushrods

Exhaust risers are being extended dry to the transom (as a matter of fact they should be done now). Eliminating the Corsa, taking out the y pipe and blocking it off.

I like your choice of heads and I think you will be happier with those than the Edelbrock heads. I think the exhaust ports might be higher than stock, so you may have to adjust the exhaust to make it work, but probably end up with a better combination. I had my rod checked just for piece of mind, and you will probably want to do that. Hate to be having this conversaition again 2 months down the road. It sounds like you're well on your way to getting the work done to get back on your way, that is one reason I turn my own wrenches. No waiting for 3-6 months before the job is done. I would like to hear how it improves hp with those heads after you get it going.
It stinks having to spend a few more thousand $$$, but that's the nature of the game.

Though I would update this just for chits and giggles

Put about 20 hours on the new motor this summer. Probably makes 15 or 20 more HP then the other one did. Nothing huge, but i'm real happy with it.

Bored it another .030, 516 inches now. New JE flat tops, rods were all fine but had them resized and of course all was re-balanced again. Crank was good, had it micropolished again. Tightened up cyl wall clearance to .005, and tightened up ring gaps to .024, and .027.

New AFR 305's with CNC chambers. Changed out the Exhaust valves to REV Inconels. Had to hone the guides out, they were pretty tight from AFR.. Deck was bad as well from AFR.. WTF.

Eliminated the Corsa exhaust, and had the risers extended to the transom, dry.

http://youtu.be/1KXnpgJ5wEI

Wow, surprising. Always thought AFR was top shelf stuff.

Well apparently not.

They still are top shelf. Just a couple issues that were easily corrected, and should always be checked with any "out of the box" product.

Gary Teague did all the machine work on the motor for me, and he's the one that told me to check the Heads. He ended up fixing them up before I put them on.

Where did you source your REV inconel exhaust valves? I did not know REV made inconel. I am looking for a set to replace the REV stainless exhaust valves that I have in mine.

part #CL1724. REV's website sucks, and they'r working on it again... or still. Call them and ask for that part #, they'll tell you they are the Inconel (super alloy or something) exhaust valves. 5.45 long, 11/32".