Hi Peter,
Your engine looks pretty good to me, but do you have the correct intake manifold? According to the Canadian Lynx I Mk.III and III* (SC F1 and F2) from hull number 1069 the carburetor was reversed so the the fuel bowl faced the front of the vehicle not the rear. From your photos it looks to me that the carby is facing the front of the motor not the rear as it should be. (Of course they may have changed it around further down the production run, but I don't think so.)
Here is a copy of the relevent bit from the manual on page Q-8.
Regards Rick