The Cat serial number book tells me your D4 was built in 1938, and I'll assume late in 1938 because your serial number is about 13 from the end of that early RD4 / D4 run starting in 1936, the last tractor was 4G9999, they then went to D4 7J series in 1939.
Without actually seeing your liners, it is difficult to give you accurate advise, but if you are only going to use the old girl at local events every now and then, my advice is to try the cheap and easy fix first, so get her freed up gently, rotating the engine in reverse can be a big help, with lots of loose juice. You can also make up a 50:50 mix of diesel and engine oil, put a couple of cups in each bore, drop a old rag in the oil to act as a wick, and light them up, they should burn for 30 minutes or more, and is very entertaining at night. This will really heat up the pistons and engine block, getting everything moving.
Once the engine is loose, get each piston at bottom dead center in turn, and put a good bead of thick grease around the top of the piston where it meets the bore, and give that cylinder a good hone, scrubbing the bore clean when you are done, the grease bead will prevent the honing trash from going past the piston.
If the head gasket looks OK, give it a good smear with Aviation Gasket Sealant and refit the head using the old gasket after you have given the valves good lapping, if the old head gasket looks dodgy, buy a new one, they used to be cheap, like about $60, current price here in Australia is around $US90 from the Cat Dealer. Florin Tractor are brilliant, they might have some aftermarket and genuine gaskets in stock, part number is 4B3052.
Original gaskets would have been copper, the current one's sold by Cat are steel, my advise is to use some Aviation Gasket Sealer on a new steel one too, I've rebuilt two of those old D4 engines, the new steel gaskets can slightly weep initially, you will definitely need to retorque your head after running the engine for an hour or two.
These early Cat diesels are considered low compression engines, and they were way over engineered compared to modern diesels, you have lots of rings on those D4 pistons, 4 compression and 2 oil scrapers, so unless your bores are shocking, I'd give her a good flogging on a heavy plow for a few hours and see how much oil she burns at the end of a couple of days, you might be pleasantly surprised she only burns a quart or two, big deal, cheaper than a full engine rebuild.
The reason I suggest you go down this path is because those D4 liners are often not available to buy, I've bought 8 for my engines and got the last stock from the Cat Dealer at the time, secondly, once you open a engine up, you nearly always take a lot longer, and spend a lot more money than you expected, getting it buttoned on up again, heading down a rabbit hole of crankshaft grinding, and then trying to find undersize bearings, and maybe replacing the camshaft, and worn timing gears.
These old Cats will often start easily, and run great even when badly worn internally, just make sure you have decent oil pressure, anything over 4 pounds at idle was good, and that you have a good thermostat, something around 190F - 195F, the diesels need to be warm. Keep it simple, and cheap, is the best advice you can get right now, if you were going contracting with the tractor, doing 2,000 hours a year, that's different, but your tractor will be lucky to do 20 hours a year.
Good luck
Mike