tenpin, you asked a lot of questions in a row.. so I'll do my best here.
Correct me if I'm wrong but does using an engine from a salvaged title make my car a salvage title? No, it does not. The title is tied to and remains to the vehicle body/chassis. Not the engine.
So at this point I should pull the valve covers to see if the cylinder heads are salveageable? Yes. It will also get you your scope back. However I would put money on the cylinder heads (at least the one on the side with the bad piston) being trashed and unusable. I once had a Ford 1.9L drop a PIECE of the valve seat, a bit of metal about 1/4" long. It looked like someone had dropped a bucket of metal BB's into the cylinder while running. Head was garbage.
Yes I'm thinking of doing an engine swap. Which of the following would you recommend:
1) Swapping with a crate engine Could... would need to swap some parts over from old engine, if usable. This is basically a new engine. Expensive option, but reliable.
2) Finding a good core and rebuild it This is buying someone else's blown engine and making it good again. You're betting on their blown engine being less messed up than yours. I don't care for this option.
3) Scrap this car for parts. This is going to be decided by your budget and willingness to deal with it. If you made it to F*** it, then part it out. If you can afford (time and money) to fix this truck, then this doesn't make sense.
In the engine what parts among these are the most expensive?:
1) Cylinder head cyl heads are the most expensive of the 3 options you have provided. But keep in mind, in your case, the block may be damaged as well, and can easily outweigh the cost of heads.
2) Connecting rod
3) Pistons
For example, let's say I found a good block for $300, and half of the engine parts (e.g. cylinder head, connecting rod, pistons) were ok. Would it make more sense to do the swap with a good block or buy a new engine outright? IF, and I mean IF you tore your engine down, and separated the good parts from the bad, and it turned out such that the half of the donor engine that was good, was the same half that was bad on yours, you could theoretically piece together one good engine from two bad ones. This can be iffy though... The chances that either your heads or block are still good, are slim however. You'll know once you pull both cylinder heads and visually inspect the parts.
Will I be able to tell if the other cylinder heads blew by removing the valve covers? Probably not by pulling the covers... but by pulling the entire cylinder head you can determine if the valves, chambers, cylinders and pistons are damaged.
The best way to do this is to find a wrecked vehicle with a good engine, like the previously posted Craigslist ad.