Ok, in theory you can just put in a new head gasket and bolt it all back together. If the original engine builder did things properly, it will all just work fine.
What would I do?
I have been burned so many times by supposedly "refreshed", "overhauled" and "rebuilt" engines that I would (at the least):
- pull the pan and check the crank bearings and crank endplay (the engine is out so this is easily done).
That's good? If this is an 807 block, then:
- pull the liners (a pain I know), clean up the block liner seat, and go through the procedure to fit new liner seals
- since it's apart carefully check the piston clearance and ring gaps (do that before setting up the liners)
- if it is an 843 block (o-ring liner seals), I might be tempted to leave the liners as is... might... forget that, I would pull them and double check as well.
- have the valves and valve seats professionally resurfaced*
- bolt it all back together knowing you now have a basically sound engine
- toss the weird ignition system and fit a conventional distributor
Ideally I would change to 40mm carbs but run what you have at first and see how it goes.
* So many people just lap in new valves and end up with nasty, wide, short-lasting seats. Do it right and they will last a long, long time.