I agree with @ok4450. It makes more sense to find external causes that are causing the oil to be diluted than to open up the engine.
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If you can solve the fuel dilution issue that ok4450 refers to, that’s your best bet. If you rebuilt the engine but didn’t touch the injectors you would still have oil smelling like fuel, and the same potential for damage.
1 qt per 1000 miles is nothing. Many new cars have that amount, whether we all feel they should or not. If it’s still pulling strong then there’s no point in a rebuild. Rebuilding it right means $1000 to $2000 in parts, plus machine shop time.
Years ago, I bought a 1955 Pontiac that was seven years old. The dealer, a franchised Rambler dealer had taken the car in on trade. The service department had “overhauled” the engine. Now that car should have been fine. It had a manual transmission that should have been trouble free
I soon learned the difference between a true overhaul and a sloppy patch. I had problems with oil getting to the stud mounted rocker arms and the rocker arms would chirp. I had the studs pulled and cleaned out. That helped, but it never fully solved the issue. GM, in its wisdom, made an oil filter an option. My 1955 Pontiac didn’t have that option. I did buy the filter assembly from a salvage yard, removed the block off plate and installed it.
As far as the transmission was concerned, the linkage never shifted smoothly. I had to have a new front bearing in the transmission as the transmission started whining. Had I done my homework, I would have learned that the Hydramtic transmissions were very reliable by 1955 and that the three speed column shift manual transmission was not all that good. Furthermore, any engine with hydraulic tappets should be equipped with an oil filter. GM did make the oil filter standard with the 1956 Pontiac.
Finally, what I learned was that replacing the rings and grinding the valves is just a sloppy patch. IMHO, the correct rebuild is to pull the engine, rebore the cylinder walls and fit oversized pistons, grind the crankshaft and fit undersized bearings, true the cylinder heads and fit new valves and seats and guides. This is what is done with a remanufactured engine. A sloppy patch with expansion piston rings and a quick valve job may buy 30,000 miles of service if one is lucky.
As for me, if I have an engine that uses only a quart of oil per 1000 miles, I would ride it out.
Back in the days of the flat head engines where the oil pan could easily be removed, maybe new rings and a valve job might be feasible. With today’s engines, it isn’t.
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I would not replace the rings. Not a good idea with high miles and you’d be wasting money. I would instead install the Honda VCM module that shuts off the VCM.
Remember to take lots and lots of pictures. This can save your asterisk *. I once took a gang of stuff out of my engine compartment so that I can clean it up (not the block) thinking that I will remember because I will be reassembling everything soon. … … … soon was months long.
The pictures that I took saved my pass. . . . for I caught it and ran a TD but only because of the pix.