I am not a guru. But you know this looks bad, but may not be
When big bore base gaskets n 750s have a habit leaking, the soution is this.. Blasrpt it to help contain the gasket. One guy i knew would punch little dmples around the case/barrel where the oil goes up.. His motors were very oil tight..
If that head is run, there wil, be abit of material comes off as it beds in, if it turns and has slight clearance, it may be ok.