Well the report from the gunsmith is that there is pitting but it is minor and the barrel is shootable. Recall that the pitting is around 6" from the muzzle. He said (joking) that "you are far enough away from it that it wouldn't hurt even if the barrel did give way". He did say that if it were him, he would not load it to maximum but keep it somewhere in the middle of the load/range. I wouldn't load this thing up more than half anyway. Just because its 161 years old.
Now I need a replacement nipple and were ready to go. I will still lash it to my bench rest and pull the trigger from 50' away for the first couple of rounds though. What I need to find is a safe place to do that with a black powder firearm here in the desert during the brush fire season. Now that would be a headline wouldn't it.