Looks to me like you just had a blown head gasket. Can happen for various reasons. Sometimes a fault in the gasket itself. Check the two surfaces, the head and the cylinder for any imperfections. If none then put back together after cleaning and keep an eye on it. If there is a problem that caused the gasket to blow you should be able to see and/or feel it.
Are you having the heads refurbished? You should have them checked for flatness at the same time. Also have cylinders checked for same.
Should clean up. Clean them before you decide. May have to mill a bit.