It's not good news.
I presume the bores are Nikasil?
Does this preclude any machining work on the block? I would be tempted to have the block face machined, if possible.

Alternatively, the hunt is on for a 4.2 litre ABH engine.

85 WR quattro
90 V8 Silver, 91 V8 Black, 93 V8 Lago
93 100e quattro V6. Titan, i think