The PO mentioned that it burns oil. At first, it showed slight oil burning (very faint blue smoke, barely visible. At operating temp, the blue smoke increased a lot.
It runs and sounds great. As I understand it, the two most likely sources of oil are bad rings and bad valve seals.
If the engine burns more oil at operating temp than when cool, would that point to the valve seals more so than rings?
I think this is NOT correct... IOW, oil smoke on startup is usually attributed to valve stem seals as it leaks down into the chambers while off & is usually burned off shortly after startup.
Where as worn rings/bores (as Taz mentioned) usually bring on the constant oil smoke... as the oil warms up, it flows better and more easily pushed past the rings into the chambers.
The problem with the valve seats is that unleaded gas can, in theory, cause rapid wear of non-hardened valve seats, allowing combustion gas to leak past the valve.
While I'm unsure if they ever changed their methods on "hardening" valve seats... I was told they were "induction hardened" by electric element just around the seat area, rather than hardened seats being pressed in, typical in most Chevy/Ford(?) heads.
I have seen these seats first hand when the "sheetmetal" intake gasket got crinkled slightly on #2 cyl (supposed pro rebuild), creating a vacuum leak/leaning on that cyl... completely burning the exhaust side seat area away to the point of NO compression
A used & recently rebuilt set of heads from a local bud was cheaper than having mine repaired...
Were I doing this project, I would run a dry & wet compression test. That will definitively quantify the condition of the compression rings, and that will pretty accurately tell you the condition of the oil control rings. If dry compression is close to wet compression, the rings are in good condition and your oil burning is coming from somewhere else, and not necessarily valve seals.
Ditto, but add a leakdown test after dry/wet tests
So, how long has it been since the donor 360 has been run? If itís been a while, itís pretty normal for it to burn oil. The rings, especially the oil wiper rings get stuck in the grooves due to the oil, mixed with sludge, thickening up.
Ditto, if it's been sitting for months expect some smoke initially, but after 15-20 should be gone. If the rings *ARE* stuck, the backyardigan method is ATF or MarvelMO dribbled into the cylinders and left to work for a few days. it can even be added to the crankcase to de-sludge the block, but be sure to not run it too long and expect to replace all the now weeping seals