does there appear to be any damage to the engine itself
- yep, you've got engine damage.
Heck, I would go ahead and pull the engine out. You are going to have to get to all the chain slide rails anyway and it will make it alot easier. Hope you don't have piston damage but I would not be too optimistic. The pistons will more than likely be the most expensive part of the whole rebuild. How many miles were on the car/chain? I would decide whether to rebuild or not based on the condition of the body/interior. Personally, I would not waste time with the test, just go ahead and pull the head to see what the pistons look like. Even if all you have to do is replace the cam and cam tower (not the cam connecting rod) it will be a pia to get another chain in there with the head on in my opinion.