Dan,
Quite normal for there to be carbon deposits on the piston crowns, and for the exhust valves/ ports to have a layer of carbon over them. scrape it out of the head, but dont touch the valve seats when scraping. these will need to be ground in. wipe grease between the piston and bores when they at the top of their stroke- this stops carbon deposits getting into the gap when scrapping thr crud off the pistons. as for the bore rusting, use a peice of 240 grit wet and dry and lubricate with oil, the polish the rust out using side to side rubs.dont go up and down the bore.