It looks very clean, which is promising. On the other hand the crankcase cover gasket broke, which is sad. The gaskets are expensive.
When you lift out the camshaft, I'd like to see a picture of any identification marks cast into it, so I can compare them with a spare GXV120 self-propelled camshaft. Meanwhile I have found that Partstree gives the same part number for the GXV120 and GXV140 self-propelled camshafts. This suggests that these camshafts have the same valve timing, strongly suggesting that non-self-propelled GXV120 and GXV140 camshafts will also be interchangeable, so anyone who is unhappy with his plastic camshaft on a non-self-propelled GXV140 can replace it with an ordinary GXV120 cast iron camshaft. Also a bit off-topic, the GXV120 in my weekly-mow machine, an early 4 height-lever Honda with an HRU194 blade system, is currently fitted with a GXV140 crankshaft (generously given to me by vcomm - thanks for that). For background, the GXV120 and GXV140 have the same stroke but different bores, so they share common crankshafts and connecting rods. The crankcase cover is also the same.
Your GXV140 flywheel is made of aluminium, unlike both GXV120 and GXV160 flywheels, which are cast iron with plastic cooling fans. I've never noticed that before. The extreme lightness of the GXV140 engine begins to be understandable. I will take this opportunity to warn people that the ignition module mounting points for the GXV140 and GXV160 engines are different from those on the GXV120 engine, and as a result you cannot fit a GXV120 ignition module to a GXV140 or 160, and vice versa. Also, while the GXV120 and GXV140 cylinder heads are very similar, note that they are for different bore sizes. The GXV160 cylinder head, despite having the same bore as the GXV140, is different again because it has a much larger intake port.
Getting back to the business at hand, I don't see any signs of water in that crankcase, yet your inlet valve stem was rusted onto the valve guide. Unless you find some water drops in the crankcase somewhere, I'm mystified.
I'm happy to comment on a piston ring set you consider buying, but I recommend that you measure the bore, and the ring gaps, before you place an order. We have not yet proven either that the block is serviceable, or that the rings are worn out.
