well I was gonna say you could put the block in vat, but with the engine being all together, that might cause you a few problems when you go to run it again...
As far as taking the old paint off, I wouldn't know exactly what would be best to use for that with the motor assembled, but I'm sure someone on here will chime in and let you know. As for painting it, I just sprayed mine the last time and it came out great. I would say that spraying would be much easier for you than brushing it, and it will come out looking better.