I agree the exhaust valve seat looks as if it needs lapping. Don't forget to check the tappet clearances - especially after lapping, they may need to be increased by removing a small amount of metal from the end of the valve stems.
Personally I don't see much sense in doing a full restoration on a mower you are going to use regularly, but what I do like to do, is fix any part I have to work on so it won't need to be fixed again. If you tidy up the engine mechanically, all you would have to do in a later restoration is make the outside look pretty: the inside would already be good. I also like to ensure that nothing will deteriorate while I own it. That probably means de-rusting any parts that might get pitted without attention, and doing a rudimentary paint job (zinc chromate primer and brush-applied rough colour coat) to keep it from rusting again. However we probably all have different ideas of what is a sensible job of preserving the machine. I think Deejay enjoys polishing his restored SB after each use, and generally treating it like a new car whenever he drives it.
