What I have found to work if you don't have an air conditioned shop to wash and do a final cleaning, it to use a light oil film on all machined surfaces until ready for assembly. The outside of the block can be painted with a primer that goes through any surface rust and etches the block, preparing it for paint. I would wait until the engine is completely assembled, and paint it all at once if you are going to go factory color. Use old spark plugs, and tape the exhaust ports, but paint everything but the bellhousing mating surface. The block needs to have a clean ground area, and the bellhousing needs to be paint free. If you aren't painting the valve covers, use an old set and bend the edges up so the paint will cover the lip of the head where the valve covers sit. Nothing uglier than removing the valve covers and seeing rust under the edge of the valve cover, or aluminum if aluminum heads. You get the idea. The etching primer will take care of that surface rust and it will not peel. Joe-JDC