So, I recently bought a blown 1.8 miata that was built by rossin racing with a full forged bottom end. I got it with the hope of rebuilding it as it look like the build was never finished. I did a compression test and all cylinders read basically 0(i triple check the timing) so the next was a leak down. The leak results i thought to be a bad headgasket, but when i pulled the head off the cylinder walls had chunks knocked out of them and the engine was hard to turn over by hand. There were a number of chunks in the cylinders so I'm left with the question of how much would a rebuild be and what would I have to replace/ need done to get this motor back running.

 

Need pics/more info

 

If there are chunks knocked out of the cylinder walls, then I would treat the block as being "suspect". That's whare I would start. If it were me, I'd source a known good running engine (short block?) and start from there. There's a good chance that there isn't much salvageable on that engine.

But that's just me...

 

The first thing I would do would be to figure out my end goal for the car. If you are planning on around 220whp or less, find a decent VVT motor and drop it in. If you are planning on 220+, find a machine shop that you are comfortable with, that knows Miata's, and see what their recommendations are?
If that block has chunks missing from the cylinder walls, that motor is now a boat anchor. I would not trust that block or head.