engine expert needed

I am tearing this engine down and found this notch knocked out of the block when the rod came apart it broke off a piece of the bottom of the cylinder it is about 3/4 inch up from the bottom but the rings stop above it maybe a inch I dont think this will be a problem but I wanted to ask the experts this is a 256 ford engine the same used on the ford 5000 and it is diesel. It doesnt appear to have hurt anything it is still holding water Thanks for any advice
 
I tend to agree with the below comment too.

But if it looks like a problem or keeps you up at night you can have that cylinder sleeved.
 
I forgot to include the picture,let me see if I can do it,well looks like I done it but sorry about all the pictures
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Well, due to the cavitation problems those Fords are famous for, where the water jackets rust into the cylinder walls I would have that block bored and sleeved back to standard. Then your broken piece would be fixed too.
 
Even without the chunk missing, that is not the best looking cylinder bore. Looks like cavities or rust spots in it. Best to sleeve it.
 
Ultradog has it right.As famous as those engines are for bore cavitation,we will not rebuild one without sleeving it.
 
That block needs to go into a hot tank. The amount of rusty crust around those lifters is probably other places as well. Sleeve all of the cylinders as well, do it right. Around $150 a hole near me here in MI
 
Sleeve it or find a good BSD block or engine, probably money ahead in the long run to find another engine without a hole in the side.
 

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