Geoff
Magnaflux is a form of crack detector. Methods to repair such cracks are welding (only for the most experienced on a cast block), brazing, stitching, and if it's only in the water jacket, various forms of epoxy can be used.
That said, reliability wise you are better off finding another block to work with. F head blocks are not that rare, and if you are going to sink the loot into machining, it might as well be on a good block.
All said and done, if one can find a good engine for $500 or so, it will be far cheaper than a rebuild.
As well, the Willys blocks were prone to wearing out. Most of the cam bushings were actually the block itself, so if these are worn, then even a complete rebuild will not restore all the oil pressure.
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