The valve head could have detached from the stem too. For me, if I have an engine on the stand, I'm going to at least disassemble the bottom end and check everything out. You had enough rust in that motor I would check the rod and main bearing journals and drop in new bearings, they're cheap. Replace the rear main seal at the same time. Check the oil pump to make sure the clearances are good and there is no rust or chunks in it. Check the play and thrust on the timing gears, etc. Super easy to do at this stage. Its not much more of a step to pop the pistons, hone the cylinders and put in new rings too. For very little money you then have a known good motor versus just hoping everything is OK.
Dont assume just because it turns over easy that everything is OK, who knows why it was pulled out originally?
Randy Rosetta KDØKWX TLCA #19351 69 FJ40 "Meanie" & 1970 Boss 302 Mustang