This kind of damage occurs in aluminium block engines when you use ethylene glycol coolants with added silica content and also cavitation.
You are supposed to use an OAT or HOAT coolant in your all aluminium engine with a 40:60 ratio with distilled water. The silica in regular green coolants acts like emery abrasive and eats away soft metal, couple that with cavitation due to air bubbles in the system and no thermostat valve - and you have the perfect recipe for disaster like this - specially if you did not dilute with any water - The green silica coolants are meant for full iron engines.
No amount of block facing will help neither will any sort of custom gasket would help, The headgasket needs solid meaty metal to seal on - which you are missing around the fire rings. You need a new block now.
For proper coolant - use the locally available caltex conc. or toyota conc and mix with distilled water only. You will not have any problems after that. I do not recommend to trust the radiator repair shop walas of Pakistan, they have no idea how a cooling system works, 99.999999% of all I have met and talked to have no idea how a radiator cap functions. All of them think that the little pip hat (vacuum valve) moves both in pressure and in vacuum. (silly) - So best read the owners manual and follow educated approaches rather than uneducated cheap ones.
@capsat - yes I have seen and experienced this on a Honda B16A engine in an Integra XSi - had to source a complete cylinder block for it.