Well seeing as it won't turn over, it's not hydrolocked, and the valves are buried in sludge, it's not looking too good so far. The engine may have seized up from oil starvation caused by sludge blocking the oil flow. Pretty much a vehicular heart attack. Post up some pics if you can, I've never seen a bad sludge problem and am quite curious to what it looks like.
plus, some of the more knowledgable guys on here can probably give a little insight on it too...
OR MAYBE....
Its was fine and just sat around for a while, and just needs a good cleaning/rebuild. I say if it's not something you need right away, and its for a fun learning experience, get yourself a Haynes manual and take you're time tearing the motor apart. Have fun with it.