As long as the threads are intact, and the case isn't cracked..... that chipping on the outside won't hurt anything at all. It will still seal up. I won't worry about it. If in doubt, unscrew the tube, put a pipe plug in it (with thread tape and "pipe dope") then fill the bottom half of the block with diesel fuel. Let it sit over night. If it leaks, look for cracks. If not your good! If it does leak, to find a crack you will probably have to have it magna-fluxed. Any engine machine shop can do that. If you are planning to use the block, it isn't a bad idea to get it magna-fluxed anyway.
