Well done VP, very nice pics of how to remove a damaged gib key. I have always suspected that the heat shock from the welding process helps to loosen the stuck key. I have used the same process myself with good results. I have also found that by applying a constant tension on the gib key over a prolonged period helps, especially if you can apply a little heat.
You are lucky to have a donor engine and are quite right to pick the best parts from each to produce one good one. Please try to ensure that, unless you are fitting new bearings and bushes, you need to fit the old bushes/bearings in the correct position for to original shafts. Failure to do this is not going to be a disaster but will result in a short period of wear until the old, non matching parts bed into one another.
Keep up the good work, I think you will beat me to first smoke but it was never a race!
Bob