Cool thread
Yep, I always paint the valley as well; I always use Glyptal:
http://www.eastwood.com/glyptal-red-brush-on-1-qt.html
I was a little worried about the amount of surface rust in the bores, on the bearing bores, in the crank oil holes. lifter bores and on the heads. The one that worries me more than a bit is the bearing bores, as even a small amount of rust can drastically change the bearing clearances. Did you double-check them with Plastigage?
Also, were the pistons, bearings, etc. installed dry? Couldn't tell from the pics...
As a best practice, once the bores are cleaned and the block is washed all machined surfaces should be sprayed with WD-40. A quick solvent wipe will get rid of it when it's ready for assembly. I typically spray down everything with WD-40 and then clean it where it needs to be during assembly.