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 - The Revival of a John Deere Combine - by The Red, John Fritz. For several years I had been driving by a farm house on the west side of Indianapolis that had a John Deere combine parked in high weeds in a lot behind the house. The gentleman no longer farmed because the entire area was developed with housing and light industry. I had stopped several times and knocked on the door but no one would answer. My curiosity was up and I wanted to contact the owner. I wanted to see what he planned to do with the combine.
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