"Is it ok to use ATF?"

Sure.

"....read somewhere on this board that the detergents/etc. in the ATF are good for conditioning the piston seals..."

I think you mean rings, and I think that means if you use it in the crankcase rather than the combustion chambers. ATF in the engine is good in that it's high in detergents and loosens up the sludge so you can dump it (though too much sludge floating around might be bad).

But ATF in the engine is bad in that it doesn't have the same viscosity stabilizers as engine oil, so gets thin as hell when hot. In other words, it won't lubricate as well. ATF isn't designed primarily as a lubricant but instead as a hydraulic fluid. In fact, some of ATF's additives promote "controlled" friction (in the tranny).

However, I've often heard the trick about adding a quart to the crankcase merely to dissolve sludge and crud. Never tried it, though...

"...had some play and could be rocked back and forth in the bore..."

Good.

"...had some good piston slap when running..."

Less good.

"...and the compression is crappy..."

Which is why I suggested a squirt in the plug holes.....

"How is the job market near Cape Cod?"

Worse than eastern MA in general, and eastern MA in general is worse than the rest of the "hi tech" world right now.

"...origanally from Northampton..."

Had dinner there a few weeks back.... Interesting town. P-town in reverse.

"...went to undergrad at UMass..."

Me too, and also for a master's. But not the main campus...
--
Don Foster (near Cape Cod, MA)