Engine Breakdown
 

Today I pulled the engine out of my Gt parts car to put it in my coupe. I obtained a Cobra intake and decided to swap out the factory EFI intake. When I took the intake off I discovered some type of buildup in the valley where the lifters sit. It was like a oil bulid up that I could scrape chucks of it out. The engine ran fine at the time I pulled it out! and I plan to replace the oil pan and pump while out. Do I have a deeper problem with this build up material???? I need to know so I can continue on in the right direction. I do not want to spend money twice.

The sludge you found comes from years of poor maintenance. When you combine stop and go city driving with no/few oil and filter changes, the end result will be sludge in the engine. If you want to use this engine in the future, it will need to be rebuilt first. The bearings are probably in very poor condition, and the oil passages are likely clogging. The block is crying for a nice, overnight sit in a hot tank. Maybe even two days. Any internal parts that rely on oil for survival are likely damaged, as are the block surfaces they wore against. Keep in mind that if they didn't change their oil, the easiest part of a tune up, then they probably didn't do very much else to help the engine stay healthy. In otherwords, it's fine if a total rebuild is what you had planned. On the other hand, using it as a short block core exchange might be a better idea.

Take care,
-Chris