Congrats, I started with a similar yet slightly worse motor three months or so ago (middle three piston sleeves had rust under the rings locking it solid). It now starts (and drives) at the flick of the key.
Pull the side cover also, you will find a ton of crud/sludge/whatever build-up in there. Keep washing with diesel as you are, but pour it from the top through the head oil return ports to wash as much as possible off. Diesel or ATF in the spark plug holes will not hurt either.
I then went to town with good ol' 3 in 1 oil on the rockers, oiling tube and lifters to really wash them out.
Then I assembled the valvetrain components with engine assembly lube/molyblendium disulfate paste, oiled the distributor shaft and plate best I could, drained the concoction in the pan out, fill with diesel again and start turning the motor with the starter without plugs to get things moving again.
Drain again, fill with a good cleaning lighter weight oil (I prefer Caltex' Delo 400 MGX), connect your oil filter that's missing, get spark, pour some gas down the carburetor (after disconnecting fuel lines) and she might just fire up on you as mine did.