I've been wondering if it has been overheated as well - the previous owner didn't really have great reasoning for removing it to sell and I didn't press him too much, it was a good deal even if the engine is trashed and I knew that going in (came with manual transmission for the cost of just a little bit more than the transmission were going for at the time). I bought it to mock up the swap and always planned on 4.8 swapping but it ran so well I've kept it in for 2 years.
I think the V8's that you are referring to that had cylinder material issues were the Nikasil M60's.