I believe the common rail engines, '04+ have the oil galley plugs in them. The freeze plugs have been in some I've seen, but not in others. There are various part numbers. It's hard to keep track of all the options, and when they change, but if you order one for your engine serial number, they should be ready to go after plugging in your engine accessories. There should be no machine work needed.
As for running .040 pistons, there are no problems. I've got one that's overbored at .020, with one sleeve in #6, and various other work, pushing 420hp as a daily tow rig.... On level 2 on the TST.... on level 3 it pushed 459hp, IIRC, and on level 4 the fuel lines are too small from the filter....
I've got one in my shop right now I'm building for the wife that's sleeved on all 6, back to std bore, and between that and linehoning the mains due to excessive rust, I've got $1200 in the block in machine work, plus the $150 I gave for it, rods, pistons, and a head. That's probably still cheaper than a Cummins block. It was a toss up to sleeve it or try to find another block, but, as I had the pistons, I went ahead and sleeved 'em. Only problem is you can't run a big camshaft, as the crank has moved up in the block slightly, making clearance on the valvetrain an issue with a big camshaft.
Currently, Cummins and Mahle offer .020 and .040 plus bore pistons. That's it, other than custom jobs and race pistons. Cummins recommends the block be sleeved when going more than .040 over. From what you've said about the shop you've consulted with, I'd seek professional services elsewhere. Heat is an issue, but it's directly related to fueling. If you're running stock to mild fuel upgrades, there is no concern, whatsoever. Also, if you cracked that many rings, and there is a lip at the top of your bore, you need to evaluate your air filtration. It sounds like you've been running a K&N Filter, or something just as sorry. Good air filtration is key to longetivity. If you need more air for more fuel, you need to go to a bigger paper filter.... not one that's coarser and let's more air in through bigger holes, along with dust and grime. More surface area is key. Running stock, the factory filter is sufficient. With some added fueling, the factory setup will still work. My suggestions are the AFE Pro-guard dry, or perhaps the Air Raid systems.... before you spend too much, however, let me point you to an article that's sheds some interesting facts on air filtration.....
http://www.genosgarage.com/GenosGarageTechArticles/TDR56_AirIntakeSystems-Part1.pdf (with no objections from the author, I hope!)
You'll need a professional machine shop to measure the bore with correct instrumentation to see if they'll clean up at .040 or less. They should also check for cracks in the block and head. You need to have your head gone through, as well. You'd be surprised at how the valves will be worn, if your bore is worn that badly. Expect to pay upwards of $600 to have the head reworked, with new guides, seals, and seats installed.
Regardless, rebuilding the engine is usually much less expensive than purchasing a new one, and certainly less then a Cummins Reman. If you can find a reputable shop, they should give you a 2yr unlimited mileage, or perhaps 36k mile warranty, for less than $10k... if you can do the work yourself, you may can assemble it for as little $1-1500.
I'd suggest staying away from Jasper engines. I've had terrible luck with them. Their quality control is horrible, albeit they've been good to deal with on warranty.....
Attention: TDR Forum Junkies 
I do admit the p/n wasn't easy to find at first, although it is now listed in the block option for my ESN. I used Cummins p/n 4990714. 
) run the number again and let me know how it goes.
