It's NOT ok. Clearly, it seized from the original "incident" as I suspected from your original running (dieing) description. That part and the head are toast. A competent machinist could fix it by taking the mating surfaces down several thousanths, then line-boring it again to spec, custom spec if the cam journals are ground instead of a new cam(s). But new parts may just be cheaper, when you consider in new valve guides and seats and such. But, with the plug fouling and all, I'm sure the cylinder looks very similar to that, and the rod big-end is the most stressed item of the "oiled" bunch. Sorry but get ready for the worst. Just the facts. For the record, I have seen Quadtarders opt to run stuff like that, and worse. Doesn't make it right, though!! Tic, tic, tic, tic, tic, tic, tic, tic, tic, tic, tic, tic, ............