If you have a good instructor, then he should be able to tell you what you can and can't do with that damage. It seems pretty superficial, but it all depends on how well you prep your build. Cast pistons are pretty forgiving, so I don't see much of a problem trying to use them. I would be careful and make sure that the block they get used in will/can be bored to match the pistons after they are cleaned up and the nicks taken care of.
If it is for your learning experience, I say go ahead and try it out, just don't spend a lot of money on it. I would hate to see a serviceable block be trashed by marginal pistons. That being said, the pistons could be turned down to .020 over, if the block is still standard then you would only need a matching bore. Everyone could be happier and you would have a nice power unit.
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