There's nothing you can "see" just by "looking" at this stage to indicate that the engine needs to be rebuilt or not.
The way you tell if an engine needs to be overhauled is when it is RUNNING. Hard to start even after ignition and carburetor tune-ups, blowing blue smoke, knocking... Those are things that indicate the need for arebuild. Carbon only indicates that you have an engine that has run at some point in its lifetime, not that anything is wrong.
Compression check. You're looking for consistent numbers. Don't know what an 8N needs but I'd expect anything above 90PSI, and again consistent, would be adequate.
If the tractor is doing what you want it to do, and isn't hard to start, blowing smoke, or knocking, fix the head gasket and leave the rest alone.
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Today's Featured Article - Tuning-Up Your Tractor: Secondary Ignition Wires and Distributor - by Curtis Von Fange. In our last episode we spent the entire day checking out the spark plugs. Is that efficency? Actually, it took more time to explain than it really did to do the inspection. At any rate we decided that a compression test was in order so we could verify the internal engine status. That way we wouldn't buy any tune up parts until we were sure that the engine was in reasonable mechanical condition. Our tests showed a fictional compression reading of 85, 80, 82 and 86 psi. That is well within a
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