Hmm, that's something I factor in when buying a vehicle. If nothing else it helps you prepare for the financial shock of getting the vehicle back into shape.
Depends what you want to do with it, as in your case it might just be best to start over with. All of my older car buddies say the cleaner you start, the easier it is in the long run, not to mention cheaper. I'd say the engines are reliable, I've seen the so called "Turd" flat tappet 454 like I've got with just a four speed go over 300k miles. All depends on maintenance. That's my experience though.
Back to your truck though, I really feel that by trying to get the smoke to go away you caused the knock. Oil pump had a hard time pushing that sludge through to the main bearings. Sure, the gauge said you had pressure with your oil "cocktail" but you most likely didn't have flow, which is critical. Reason bearing spin is because things are too tight. Could be that whoever built that engine didn't pay attention to clearances and such.