the first thing to do would be to get it (or attempt to) get it running so you can find out, does it have adequate compression? If yes. good. If No, why not?
So you get it running but it's knocking... what's knocking? is it the rod big end? wrist pin? Or it may sound tight, but it's smoking oil like crazy, you either have a hone and ring job, if the cylinder is not ovaled. Or you have a bore job, over size piston, and rings. Or you have worn intake guides letting oil past (if no seals are used)...
so the best thing to tell the condition of an engine... is to run it.
of course being a flat head, you can pull the head off easily and check the cylinder for scoring... that'll tell you a lot there.
Usually with older engines, i clean them up, get them running. if they run good with no leaks, or knocks. i let them be. I only repair when it needs it and repair what is needed.... i've learned the saying "Leave well enough alone" the hard way.