Acetone and ATF mixed in a 50/50 solution will free a stuck engine, or so i've heard. It supossedly is better than any off the shelf rust penetrant.
There is an engineering type report on the forum somewhere that confirms this. I'd mix some up, squirt it down each plug hole wait a day and see.
In any event, I wouldn't "scrap" it, sounds so final. Someone is interested in a whole motor seized or not. The alternator is valuable, if low mileage the trans is valuable, etc. Even people need whole cases sometimes when theirs are broken.
Being a dry sump motor one wouldn't expect much oil in it. The water could have come from condensation which is generally what rusts them up any way, just sitting around. In a cold shed outdoors or such, temp changes causes condensation.
Not necessarily or even probably malicious abuse.