Shaun, if you're this far it wouldn't hurt to take it the rest of the way down and have it cleaned and checked out. I don't know the begginning of the story or what your plans are for the set up so that will affect what you do.
Just for a side note, that rust may not be all that bad. I've taken a couple motors that were completed siezed from rust (one sat uncovered at the coast for 7 years) and just pulled the heads, cleaned out the bulk of the rust (a little steel wool or scotchbrite) and soaked cylinders/pistons with wd-40 and got the rotating assy to break free. Then I oiled/flushed cylinders and cleaned the heads up, rebuilt carbs, threw it back together and it worked well for many seasons. If the rest of the cyl bores look ok it might be an option.
If this is a perf appl and/or you're willing/wanting to go into it anyways, then definately take it down while you have it this far. If you want to just get it on the water and have a good time, you might be surprised how a couple gaskets and oil changes/break in might get you by. I did this to a boat when going to school and I wanted to get on the water and ski and that boat (friend of mine) still is using it 10 years later. A couple of the other times were just to get customers by that couldn't afford the motor rebuild at a marina I worked at in college.
.02,
jd