Looks fine to me, just get some #30 ball bearings and do a final buff with pure non oxidized Pennzoil in 20 weight. If you cant find the #30 bearings, just hit up Midas for some muffler bearings. That should do the job.
we keep a 55 gallon drum in the corner of the shop for ferrous dirt. every year or 2 we seal it up and send it to the 'wooly willy' factory....... :wink:
I agree, the bottom bracket should be fine. However, the bearing cups might be scored from the wrecked bearings. Someone was really determined to keep riding.