Here are some pictures of the inside of the tank. It looks pretty bad; a lot of rust and the remnants of what looks like a liner of some sort.
View attachment 226583View attachment 226584
Here's a picture of some of the old gas and debris that poured out.
View attachment 226585
I have the tank filled with vinegar. I plan to agitate the inside surface of the tank with a drain cleaning brush and then some shaking with a chain. I'll post some after images. I'm guessing I'll need a lot of iterations of the process.
I'm not sure what is best for removing the loose gunge in the tank, but vinegar or other acids probably won't strip out that failed tank liner.
MEK is the stuff you want apparently, Methyl Ethyl Keytone ?
Eats old tank liner for breakfast.
The trouble is it will also eat that quite respectable paint job you have, unless you can find away of sealing the MEK inside the tank.
Once you've got the troublesome liner out of the way, you can start killing the rust, and find out if there are any pin holes right through the metal.
As for your engine needing some serious work, well yes, that's quite a serious setback, which could cost loads to fix.
Or you could simply chuck a later engine in there as a tempory measure.
Not something that would impress the purists, but it would get you rolling until a genuine XS1 type engine (or bits) turn up at the right price.
Even in rip-off Britain, a dealers price for a used late engine is around £500 if you haggle, less if you find one privately.
I'm sure there must be plenty about in the US.