I need 020+ rod bearings - SD220

It does me good to hear your keeping original. Most are looking to excuse there "need" to replace with V8. The running engine in my K-7's are much more loose than many would run.
I would be more concerned about a top ridge than a few .001's over on the bore.
Over boring and sleeving back to std is a sound repair, and if the shop doing it is competent, it can be better than new. The sleeve can be harder than the blocks cast iron and last longer. On a wetlined diesel, it is uncommon to find a top ridge, the liner is so hard.
On of my K engines I re-bearing'd. made a big difference, but not as good as a re grind, but will outlast my lifetime. Bearings for the BLD are scarce, they haven't been available for decades from the bearing mfg, so NOS is the only option.
You only, can decide how much it is worth to you to repair the original engine, or whether a replacement IHC 6 is more cost effective. If the ring gooves aren't worn and the piston skirt doesn't have a lot, sleeveing would be a good option

Nothing wrong with rebuilding it the right way. The reason I brought it up was because of what I ran into on my SD240. It had been previously bored .060 over. The bores measured within spec but the top ring grooves on the pistons were worn with a taper. the engine laid on the bench for a yr. contemplating what to do. No pistons available of course. I then learned that the ring grooves could be machined, Hastings had spacers available, much like the sides of a three piece oil ring, to take up the extra width and standard .060 rings could be installed. Lucky for me I found a nos .060 ring set on ebay. I asked the machine shop what he thought of the piston repair. His answer was, better than it was. I think it was an acceptable fix. My R150 is not and will not ever be a daily driver.
Good luck with your rebuild.

I'm going to come down on the side of doing the rebuild with lined cylinders. You should be able to use your old pistons that way (unless they are too badly worn) and you will have an engine that should easily last another sixty or seventy years.