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Before buying anything for the honing, look into what it would cost to have a machine shop do the work. They have better honing tools, but more importantly they have better measuring tools (and know how to use them). As it stands you don't know what the bore size is to + or - .050", you should be able to measure it to .0001" and tell how out of round, and tapered.
I'm not saying you shouldn't do it yourself, but you'll need to buy some stuff (and learn how to use it). FYI, there are some amazing prices on ebay for old machine shop tools, but you'll need to be able/have someone calibrate them.
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