Hiya, thanks for the posts - and sorry I should have mentioned what engine it was!
It's an I4 DOHC jobby out of my donor Sierra.
And yes, I know it's a crap engine, but it was cheap to get!
You've all made a lot of interesting points relating to timing chain failure. The chain tensioner often gets mentioned as a weak point in this engine, if this did slip the chain then maybe what I'm looking at is a cheap bodge job to get the engine working again. The valve guide damage isn't the only bad bit about the cylinder head - there's several other faults such as bearing surface scoring, bruising to the head surface.....
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I think the best option is to scrap at least the cylinder head. Last time I was down at the local scrapyard (G&W Bridges on the M23) there were plenty of I4s available to scavenge - should be able to pick up a better one for little cost. Or maybe source a Zetec instead
RAYLEE, thanks for your comment about pressing in new valve guides - I would have taken that option if there weren't other problems with the head.
In the meantime I'll finish cleaning the cylinder head and get to work on an ornamental glass table.